"Washington, D.C. is rapidly growing as a hub for startups, bolstered by supportive policy measures. D.C.'s innovation scene is uniquely intertwined with the federal government, making it an attractive location for startups seeking regulatory insight."
Washington, D.C. may be more well known for politics than for entrepreneurship, but the U.S. capital has been gaining a reputation as a startup hub. More than 16,000 tech companies are based in Washington, D.C., making it one of the country’s largest tech hubs. The ecosystem benefits from a growing tech talent pool and proximity to relevant federal government departments, including the Federal Communications Commission and the Department of Homeland Security, as well as an abundance of Fortune 1000 companies headquartered in the area.
WalletHub ranked Washington, D.C. the 3rd most educated city in America in 2022. The city is home to several prestigious universities, including Georgetown University, Howard University, and American University and has one of the nation’s most educated populations. Techstars Washington, DC Powered by J.P. Morgan was announced in March 2022, with a goal of providing equitable access to funding and support for underrepresented founders. It’s first cohort started the following September. In May 2022, the mayor announced that the district would invest $5 million to develop two innovation districts to leverage existing economies to spur new ideas for growth and development: the Penn West Equity and Innovation District (“Penn West”) and the Mobility Innovation District (MID).
The annual DC Blockchain Summit was held in March 2023.Recent large deals include insurtech company Pie Insurance’s $315 million Series D in September 2022 and auto Fintech Caribou’s $115 million Series C in May 2022.
Ecosystem by the Numbers
The DC/Baltimore region is #2 in the U.S. for Life Sciences research talent, according to CBRE’s Life Sciences Research Talent 2022 report. The report cited the area’s strong industry presence and top-ranked universities, including George Washington University, Johns Hopkins University, and George Mason University. As of June 2022, Johnson & Johnson JLABS hub was home to more than 25 early-stage Life Sciences companies. Medtech Current Surgical raised a $3.2 million seed round in February 2023.
The 2022 Cybersecurity conference was held in October, as was the most recent edition of the annual Women in Cybersecurity Reception. The Billington CyberSecurity Summit is scheduled for September 2023. Social engineering prevention and detection platform Picnic raised a $14 million Series A in February 2022. Cybersecurity startup GreyNoise Intelligence closed a $15 million Series A in June 2022.
n July 2022 the D.C. council passed the Climate Commitment Act, pledging to reach carbon neutrality by 2045. The District of Columbia ranked sixth among states on the 2022 State Energy Efficiency Scorecard from the American Council for Energy Efficient Economy. Electric vehicles infrastructure platform Inspiration Mobility raised $215 million in May 2022. Climate technology company Arcadia raised $125 million in December 2022 after raising $200 million in May 2022.
Reasons to Move Your Startup to Washington, D.C.
Access to Funding
The Office of the Deputy Mayor for Planning and Economic Development’s (DMPED) Vitality Fund assists businesses within targeted sectors to relocate, expand, or remain in D.C. In September 2022, DMPED and 1863 Ventures opened applications for the latest round of the Inclusive Innovation Equity Impact Fund. In September 2022, Comcast’s RISE’s DC program announced it was awarding an additional $1 million in small business grants for local founders from marginalized groups.
Qualified high technology companies can claim tax benefits to support their growth, including a reduced capital gains tax rate of 3%, a new hire wage tax credit of up to $15,000 annually for each qualified disadvantaged employee, a new hire retraining tax credit, and a five-year freeze on real property taxes for office improvements. The Creative and Open Space Modernization Tax Rebate offers qualifying companies a tax rebate of up to $1 million annually for five years to assist with office improvements.
The Scoring Tech Talent 2022 report from CBRE found that the D.C. region is the fourth best market for talent thanks to the size of its talent pool and the large number of tech graduates. The D.C. region also ranks #1 for diversity among major tech hubs, with 31.4% of IT professionals women. D.C. ranks second best for the percentage of women in the tech workforce, according to a SmartAsset analysis.
Are you interested in diving deeper into this ecosystem? Drop us a message. Our Ambassadors and Partners can plug you in.