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Houston booms as a top U.S. startup hot spot, says new ranking

Houston booms as a top U.S. startup hot spot, says new ranking

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A new report finds both Houston and Texas rank highly based on startup creation. Photo by Hero Images/Getty

Houston is a bustling hub for startup activity — and the numbers don't lie.

A new ranking from real estate investment marketplace Roofstock places Houston at No. 10 among the major U.S. metro areas with the highest rates of startup formation. Roofstock's ranking, based on data from the U.S. Census Bureau, puts the Houston area's startup formation rate at 9.48 percent. The startup formation rate refers to the number of new businesses in a given year divided by the total number of businesses.

Here's the other Houston startup data cited by Roofstock:

Annual number of startup formations: 9,214
Annual number of jobs created by startups: 55,475
Number of jobs created by startups as a share of all new jobs: 14.44 percent
"In the past years, Houston has seen a massive burst in its startup ecosystem. … Houston is one of the best places in the United States for entrepreneurs to launch and grow a business," Houston-based app developer Bixlabs says.

As a matter of fact, the Houston area's ratio of new business founders to total business founders stood at a healthy 21 percent as of December 2020, according to career website LinkedIn. Houston was sandwiched between Salt Lake City (26 percent) and Dallas-Fort Worth (20 percent). Also in 2020 and 2019, Houston ranked sixth on a list published by residential real estate platform Clever of the most affordable U.S. metros for startups.

"Considering Houston's metro is tied with San Antonio's for the highest average investment in small business, and the proximity to great food, the Gulf of Mexico coast, and attractions like Minute Maid Park and the NASA Space Center, we would definitely suggest considering starting a business here," Clever says.

Two other Texas metros appear on Roofstock's list — Austin at No. 3 (startup formation rate of 10.61 percent) and Dallas-Fort Worth at No. 5 (startup formation rate of 9.82 percent).

Here's the additional data for the Austin metro area:

Number of annual startup formations: 3,858
Number of annual new jobs created by startups: 21,357
Number of jobs created by startups as a share of all new jobs: 16.49 percent
Here's the additional data for the Dallas-Fort Worth metro area:

Number of annual startup formations: 10,731
Number of annual new jobs created by startups: 69,696
Number of jobs created by startups as a share of all new jobs: 15.11 percent
The Las Vegas metro area holds the No. 1 spot on the Roofstock list, with a startup formation rate of 11.44 percent.

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This story originally ran on our sister site, InnovationMap