Phoenix ranks No. 1 large city for startups, Arizona dominates national report

Article originally posted on Phoenix Business Journal on December 17, 2025

When it comes to the nation’s most favorable ecosystems for startups, Arizona is proving to be a robust hot spot.

A report by real estate platform CommercialCafe found Phoenix to be the No. 1 large city for nurturing startups while Tucson and Mesa are Nos. 4 and 5 in the ranking for smaller cities, respectively.

The report looked at which places are most hospitable for early-stage companies navigating an era of tightening capital since the generous days of 2021. In times like these, CommercialCafe said, “startups must now rely more heavily on fundamental business health and the strength of their local ecosystems.”

To measure that, the website analyzed indicators such as office or coworking costs, networking opportunities, startup density and survival rates, Kickstarter funding success and the percentage of college-educated people.

It did separate rankings for cities with more than 1 million residents and those with a population of between 500,000 and 1 million.

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