Miami’s tech scene has boomed during the pandemic. In the most recent quarter, local startups raised a record $1.4 billion, up from $164 million in the same period last year, according to data from CB Insights. But the boom has not benefited everyone equally.
Entrepreneurs from underrepresented groups, especially women and Black founders, have a harder time accessing the capital that’s flowing into Miami, according to data from a Dec. 1 report on equity and inclusion in the city’s startup scene released by aīre ventures, a Miami-based social impact investor group.
Miami tech is one of the pandemic’s biggest winners
As companies began shifting to remote work around March 2020, tech workers got a chance to ditch the high costs and close quarters of traditional startup hubs like San Francisco and New York. Many of them chose to relocate to Miami, a sunny, low-tax haven with a lax lockdown policy and a tech-friendly mayor. In the year that followed, New York and San Francisco were among the cities that lost the most tech workers, while Miami was one of the biggest winners, according to LinkedIn data.
Net migration to Miami increased sharply in the fourth quarter of 2020, according to data from Redfin, a website that helps people find real estate. The spike coincides with the onset of winter, the US’s worst wave of covid-19 infections, and a viral tweet from Miami mayor Francis Suarez that helped generate a wave of hype around the city’s tech scene (see our feature about going out on the town with Miami’s new arrivals from Silicon Valley).
The city saw a corresponding spike in venture capital investment for local startups. Miami tech companies have raised $2.4 billion in the first three quarters of this year, triple the amount raised in the same period in 2020.
White and Hispanic entrepreneurs are among Miami tech’s biggest winners
At the beginning of the boom, local entrepreneurs encouraged new arrivals to sign onto a Miami Tech Manifesto, which laid out a vision for a startup hub committed to “inclusion, access, racial equity, diversity, [and] upward economic mobility.” Miami boosters often talk up the city’s diversity as one of its greatest strengths.
But for all its diversity, Miami still ranks among the most segregated and unequal cities in the country—and opportunities in the tech sector are still stratified along racial lines. It’s true that the upper crust of economic and political power in Miami includes Hispanic residents, particularly Cuban-Americans, who make up the majority of the city’s population. But that leaves out other groups. “We’re a majority-minority city, but we forget that that creates a whole other slew of complications when you look at minority-minorities like Black folks who have traditionally had a very tough time raising capital in Miami,” said Leigh-Ann Buchanan, the founder of aīre ventures and one of the main authors behind the Miami Tech Manifesto.
Accordingly, Miami’s Black and Asian entrepreneurs are less likely than their white or Hispanic peers to say that they can easily access the resources and professional connections they need to grow their businesses. Similarly, women report having a harder time than men accessing capital and connections.
Entrepreneurs who just moved to the city are more satisfied with Miami’s tech scene than local founders who have been in the city for the long-term. That may indicate that the new arrivals, who may still have personal and professional connections to places like San Francisco and New York, aren’t struggling as much to access funding and professional networks, which is the number one complaint among Miami entrepreneurs.
Buchanan says she’d like to see Miami become a more equitable startup hub. First, she argues, the city needs more venture capital funds led by women and people of color, and existing investors should direct more funding to entrepreneurs from underrepresented groups. Second, the city should help more local residents get involved in tech by addressing underlying opportunity gaps: retraining workers to take on tech jobs, making sure people have access to the internet, and so on. And finally, someone should be regularly collecting and publishing data on equity and inclusion in Miami’s tech scene—which Buchanon and others have attempted to do with their recent report.
Their goal is not to condemn Miami, but to push the city’s tech community to improve. “I think you need to give growing tech hubs like Miami a little bit of grace and compassion to find our way, the same way that we would for startup founders,” said Buchanan. “It’s responsible for us to hold it accountable, but it’s also responsible for us to give it space to evolve, iterate, and grow.”