The next Silicon Valley: 4 fastest growing startup cities in the world are Asian

Here’s new evidence that Asian cities are the fastest growing tech startup hubs in the world. Beijing, Tokyo, Shanghai, and Bangalore occupy the top four ranks in terms of the rate at which VC deals are being made, according to new data compiled by research firm CB Insights. It compared tech deals made in the 12-month period ending last month with those in the previous 12 months.

Only cities with 20 deals or more were considered.

The number of deals nearly trebled in Beijing, which saw 165 percent growth, and more than doubled in Tokyo (126 percent). Shanghai saw 81 percent growth in the number of deals, and Bangalore witnessed a 66 percent rise.

While Bangalore’s growth was more modest, India had three other cities in the top 25 – New Delhi, Mumbai, and Gurgaon. This suggests that the startup activity is spreading out more in India.

This backs up a recent study that showed India is the fastest growing startup ecosystem in the world, with 800 startups sprouting annually and new hubs maturing across the nation.

Less growth in US

Apart from the aforementioned cities, no other Asian city made it into the list.

The CB Insights report gives more importance to growth in the number of deals than the total investment amounts, which tends to get skewed by a few mega deals. But even in dollar terms, four Indian cities were in the top 20, with Gurgaon in fifth position and New Delhi in sixth, obviously boosted by the huge Softbank fund inflows to ecommerce site Snapdeal and taxi app Ola. Gurgaon is a satellite city of Delhi, and usually clubbed together in the National Capital Region (NCR) of India.

Bangalore, where Indian ecommerce leader Flipkart had a billion-dollar funding round this year, came 11th on the funding growth list, while Beijing was 20th, Shanghai 22nd, and Tokyo 27th.

St Louis in Missouri, America, topped this list, followed by Cincinnati, Munich, and Los Altos. But Los Altos and Munich had negative growth in terms of the number of deals, and St Louis had zero growth. Some of the established tech cities in the US, like New York, Los Angeles, and Cambridge, Massachusetts, saw little or negative growth.

Of course, it takes a lot more than VC deals and investment flows to make the next Silicon Valley. But the numbers do indicate that the most vibrant startup regions in the world are now in Asia, and if there’s another Silicon Valley, it will probably be Asian.

See: Dave McClure: hard to see why investors are not more bullish on India, there will be a feeding frenzy in 5 years