Detroit’s startup scene is exploding and here are the numbers to prove it

Take this at face value: Detroit has 50% more venture-backed startups than it did three years ago. This comes from a study from the Michigan Venture Capital Association (MVCA) which found there are 35 active venture-backed startups in Detroit. Sure, that’s not a huge number compared to other regions, but the growth is notable.

I live in the great state of Michigan and can attest to the growth. Startups are quickly becoming part of the culture in areas previously dominated by massive, soul-crushing corporations. Over the last several years, startups became part of the soul of Detroit, Grand Rapids and Ann Arbor, and these reports confirm that feeling.

The MVCA points out that the State of Michigan is following a similar growth trend, though at a slighter slower pace than in Detroit. Over the last five years, there has been a 48% increase of venture-backed startups in Michigan.

There are several things that make Detroit attractive to startups. Office space is inexpensive and talent is plentiful thanks to the proximity of world-class universities and corporations. Several area industrialists like Dan Gilbert and the Ilitch family have turned to startups to help reinvigorate the area around their core businesses.

According to the MVCA, state-wide, 42% of VC money goes into the life science sector while 31% is invested into information technology. However, in the city of Detroit, the distribution is flipped with information technology netting 43% of the investment while life sciences accounts for 23%. Mobility accounts for 5% statewide and 8% in Detroit.

Like other areas, going back to startups completes the circle for Michigan businesses. At one time, the massive automobile industry was just a collection of startups run by determined, and sometimes ruthless, entrepreneurs.

Billy Durant, Henry Ford, Walter Chrysler and the Dodge brothers all built their companies inside Michigan but the success didn’t happen overnight. Through heavy competition, corporation and capital investment, these men built empires out of startups and Michigan, like other places, are hoping a new group of entrepreneurs can start an industry with the same staying power as the automobile industry.

I used to joke with people that there was no reason to come to Michigan now that Founders and Bell’s beer can be found nationwide. But that’s not true anymore. Come to Michigan and see the new life in downtown Detroit. Drive the 45 minutes to Ann Arbor and see the vibrant startup scene that has existed for years. Go over to Grand Rapids and walk around the hopping (beer puns are the best) city filled with breweries and startups. Finally, make your way over to Lake Michigan and see the monstrous sand dunes that line the best Great Lake. And if you happen to make your way up to Flint, drop me a DM and let’s get coffee. The water’s fine.