If you’re looking to start up a business, the Dallas metro area is a great place to…well, start. In fact, it’s just been named the No. 3 Fastest-Growing Startup City in the U.S.

That’s according to a new report by York IE, a New Hampshire-based growth and investment firm for tech companies. The firm used its proprietary data and automation platform to compile the rankings, focusing on metro areas that have shown significant momentum in startup funding. York IE highlighted five places where startup business is booming, along with the companies that are helping to drive that growth.

The report finds that venture capital investment stabilized in 2023, but the market has not as yet returned to previous levels. U.S. startups received $20.6 billion in angel investments and VC funding in Q4 of 2023—roughly in line with the numbers from the previous quarters, York IE said. 

Philadelphia and Los Angeles were ranked No. 1 and No. 2 among the fastest-growing startup cities, with 220% and 195% growth compared to average quarterly funding over the prior 12 months, respectively. Rounding out the top 5 are Nashville, Tennessee, with a growth rate of 182%, and Durham, North Carolina, with an 83% increase in startup funding, showcasing the diverse geographic spread of burgeoning startup ecosystems.

Over $730 million raised by Dallas metro startups in Q4 2023

At 195% growth, the Dallas metro area ranked No. 3 as a “Fastest-Growing Startup City” with $730,591,658 in Q4 2023 funding. That funding amount represents 30 funding rounds, York IE noted.

The growth rate, a key metric in the report, was determined by comparing each metro area’s Q4 funding to its average quarterly funding over the prior 12 months, highlighting cities that have experienced a significant uptick in investor interest and startup activity.

The top 3 reported fundraising rounds in North Texas in Q4 2023 were, per York IE:

Shield AI: $300 million Series F
A defense technology company based in San Diego with offices in Dallas, Washington D.C., and abroad, Shield AI announced the expansion of its Series F funding round to a total of $500 million on December 29. An additional $100 million in equity, raised at the Series F price, and $200M in debt from Hercules Capital were added to the initial $200 million in Series F equity closed in November. Last October, we told you about Plano-based Martin UAV—which was acquired by Shied AI in 2021—enhancing its V-Bat military drones with a new, AI-powered teams capability. Shield AI co-founder and CEO Ryan Tseng explained why drone swarms are critical to our national defense.

DataBank: $188 million
DataBank, a Dallas-based provider of enterprise-class edge colocation, interconnection, and managed cloud services, raised $533 million in late November via a combination of debt and equity to fund the construction of new data centers and meet the fast-growing need for capacity that’s driven by the rise of artificial intelligence applications. Of the total, $188 million in equity was raised from existing and new investors, and a $345 million construction loan for a new data center under development in the Atlanta market was also obtained. 

Island: $100 million Series C
In October, Dallas-based Island, a tech unicorn and a pioneer and leader in the enterprise browser market, raised $100 million in its Series C financing round, boosting the company’s valuation to $1.5 billion.

The report also cited energy company HOG Resources, which raised $52.9 million, and Dallas-based FieldPulse, which raised $21 million in a Series B round.

As to overall funding raised in Q4 2023, Dallas’ $730 million placed in at No. 6 in the U.S. The five cities that raised more included San Francisco (No. 1 with $6.5 billion raised), New York City ($2.8 billion), Boston, ($2.02 billion), Los Angeles ($1.7 billion), and Austin ($1.1 billion).

Per York IE’s report, these are the 10 metro areas where companies received the most funding in Q4 of 2023:

You can download the full York IE report by going here. 

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