Everybody likes a good comeback story. The city of Detroit has got one of the best.
Historically known as the heart of the automobile industry and the birthplace of MoTown, Detroit faced a low point five years ago when it filed for bankruptcy protection.
But in five short years, a new generation has transformed the city with new strategies and business models, turning it into a thriving hub of innovation and entrepreneurship, particularly in the tech sector.
There are 38 active venture-backed startups in Wayne County, a 58% increase over the last six years. Of those startups, 47% are information technology companies and 19% are mobility-related companies with the remaining companies divided among the business services, consumer products, life science / healthcare and other industries.
Ted Serbinski of Detroit’s TechStars says that the startup ecosystem across Detroit has grown immensely in the past decade. “As we enter this new decade, I see that growth is accelerating at an exponential rate.”
Detroit has an impressive network of resources including talent, mentors, research institutions for product development, and funding.
Access to talent
Michigan’s University Research Corridor (URC) – a top university innovation cluster that includes Michigan State University (MSU), the University of Michigan (U-M) and Wayne State University (WSU) – helps enhance the entrepreneurial ecosystem in the area.
One mentorship example is Detroit’s entrepreneurial hub known as TechTown. Located in a former GM auto dealership, TechTown has helped over 2,000 startups grow by connecting them with funding and other resources. The incubator supports as many as 450 businesses every year.
Another example is Inforum’s inGAGE™ Master Class, which supports women who are serious about growing their companies, even when those companies are still small. Its peer-to-peer forum helps women entrepreneurs form a supportive network and learn to assess the operations, management, finances, and personnel of their companies to examine strengths and challenges.
According to the newly released Detroit Entrepreneurial Ecosystem report:
In the last year, 19 startups in the Detroit area attracted more than $63.8 million from venture capital firms.
Of the 19 startups that received venture capital investment in 2019, 47% are information technology companies and 21% are life science / healthcare companies with the remaining companies divided among the mobility and consumer products sectors.
The New Economy Initiative has also given more than $115M in grants that have helped launch and grow nearly 1,600 ventures in the Detroit metro area.
The strong sense of community in the city has given rise to a pay-it-forward attitude, according to the report:
“Economic trends show that as entrepreneurs lead their startups to exit, they often mentor and invest in new startups that emerge, resulting in a healthy innovation economy.”
It’s quite a comeback story and it doesn’t stop there. Trends indicate that Detroit’s entrepreneurial ecosystem will continue to grow and define it as a nationally-recognized startup destination.