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Philadelphia

Philadelphia’s globally competitive health IT and pharmaceutical programs at the University of Pennsylvania, Drexel, and University City Science Center have catalyzed a number of recent exits along the health sciences vertical. A concentration of old money has encouraged a burgeoning industry cluster around financial technology. The recent acquisition of fintech startup Ecount by Citigroup was instrumental in inspiring angel investors to focus attention on this up and coming sector. Philadelphia’s low costs of living sets it apart from similarly sized cities and attracts waves of young migrants who have bolstered other existing startup sectors like data warehousing, insurance and enterprise software. However, there are hurdles that come with being in the country’s second-oldest city, namely an uncooperative city government, aging infrastructure, and an unattractive tax structure.

In This Market

These businesses offer industry expertise and are a source of startup talent and potential customers. They help fuel the local startup community.

Opportunities

  • With companies such as GlaxoSmithKline, EPAM Systems, and Vanguard making their home in Philadelphia, there is ample talent for healthcare IT, data analytics software, and fintech startups.
  • As a prominent education town with universities such as Penn and Drexel, there are numerous talented young people who move to the city every year.
  • Philadelphia's proximity to the Northeastern metroplex means that it stands to benefit from the region's ample talent and access to capital.
  • The city's low cost of living when compared to other cities of similar size makes it attractive to bootstrapping startups.

Risk Factors

  • Philadelphia has aging infrastructure, an uncooperative city government, and a very unattractive tax regiment for startups.
  • There is a lack of angel investors and tech influencers who could guide the nascent ecosystem.
  • The city's closeness to New York City means that talent retention is a problem for entrepreneurs who want to attract the best and the brightest.
  • There is no major tech presence, such as the likes of Google or Facebook, in the city. This means that there are fewer skilled engineers, and in the event of an acquisition startups inevitably leave the city.
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