UpSurge, which aims to propel Baltimore into the top tier of innovation cities by building and bolstering a local innovation economy where all belong, released today a data-driven analysis that uncovered $11 billion in potential new Equitech startup capital over a period of three to seven years, on top of organic growth.
The $11 Billion Opportunity report highlights the unique – and often overlooked – assets of Baltimore, and the potential for those assets to drive the acceleration of its tech economy within the decade. It also provides specific benchmarks to achieve this goal.
The report is a call to action to local companies, institutions, and investors, proposing that Baltimore has the opportunity to establish a new norm, a collective commitment to align around the Equitech vision and to effectively deploy resources that drive inclusive growth. With many doing a small part, the impact on Baltimore would be transformative.
“By every metric – whether we measured the number of companies, dollars invested, average deal size, or number of mega-deals – Baltimore is clearly a tech economy on the rise, even as the country declined overall,” said UpSurge CEO Jamie McDonald. “Support for Baltimore startups continued to grow in 2022 during a significant decline in venture capital funding nationally. When we set out to discover why, we discovered Baltimore has all the ingredients it needs to take its place among the world’s leading brain hubs.”
The UpSurge report used data and logic-based algorithms to examine six pools of existing capital. These included: local venture investors; national venture investors currently active in healthcare or cybersecurity or with a focus on diverse founders; Baltimore-based foundations and endowments; high-net-worth individuals in the region; local corporations or national corporations with stated goals of investing in Black entrepreneurs; and government sources, specifically state investment in the tech sector.
The report revealed hidden, potential wealth in the following findings:
- There are 10,346 decamillionaires (more than $10M net worth) in the Baltimore area.
- Baltimore has a deep base of 121 foundations with $25 million or more in assets and a total of $55.8 billion in assets overall.
- Even as U.S. venture funding decreased by nearly 1/3, local annualized venture funding and average deal size are projected to increase by 11% and 40% (YOY) respectively.
- Healthcare and information technology (especially cybersecurity) remain Baltimore’s tentpole sectors, leading in both dollars raised and deal count, even in a slow year for both nationally.
- Core strengths in healthcare and cybersecurity still offer significant potential for growth, as Baltimore does not garner the share of funding commensurate with the scale of the sectors relative to the country.
- Baltimore’s most active investors around the country have local connections.
- Public commitments of corporations, VCs and private equity (PE) funds to increase support for diverse entrepreneurs present robust opportunities for Baltimore tech, which boasts high percentages of women founders and founders of color.
- Maryland lags competitor states in overall government commitment to tech and startups.
- Baltimore companies represent ~62% of the state’s cyber and healthcare economies, so aligning state funding with that of other states would benefit Baltimore meaningfully.
In addition to identifying and quantifying untapped investment funding, UpSurge analyzed what these findings suggest for the future of Baltimore’s startup ecosystem and evaluated their context amid larger nationwide trends.
“Our growth rests on a foundation laid by local universities, visionary entrepreneurs, ambitious Baltimoreans and a group of dedicated believers in this city’s promise,” said McDonald. “Our country is on the precipice of a realignment. The exodus of companies and talent from the leading brain hubs to new markets – particularly southern and post-industrial cities – is only expected to accelerate. And here sits Baltimore in a prime East Coast location with world-class universities and university health systems, major corporations, unmatched federal spending on research and development, a concentration of diverse talent, extraordinary accelerators, and a relatively low cost of living. As an emerging tech hub, our city is among the most competitive.”
The UpSurge report also detailed a plan forward for business leaders, entrepreneurs and community leaders, offering specific suggestions on how to unlock the equity available. Recommendations included targeted cultivation, marketing, and advocacy.
“Startups are primary drivers of economic success, accounting for more than 20% of gross job creation in the U.S. each year,” said McDonald. “These are jobs that deliver pathways to career mobility, wealth creation, secure families, and stable neighborhoods. Over the past two decades, Baltimore’s business growth was driven by Main Street businesses and large corporations. Those are vital components, but entrepreneurship is the key to our city’s equitable growth going forward, and we have all the ingredients for the nation’s first Equitech city right here.”
