Maybe “startups” is not the first word that comes to mind when you hear the state of Arizona being mentioned. But you’d be surprised how many good things there are about launching your business in the Copper State. Hubstaff takes a look at the top five cities in Arizona for launching startups in.

While Arizona has been traditionally known for its tourism and real estate industries, the business setting has changed dramatically in the last decade or so. The budding startup scene got off the ground after the financial and housing recession in 2007-2009. Arizona is turning into a hotspot for tech startups looking for an alternative to the overcrowded and expensive Silicon Valley and busy metropolitan areas like New York.

In the last ten years, a number of incubators and accelerators came to life in the state. Due to the efforts of the Arizona State University that built up its tech and R&D programs, there is enough local talent to employ. Investors have also oriented themselves towards Arizona, and funding options are not scarce. Plus, the state has some of the best startup costs in the country, with lower than the national average per capita income that goes for taxes.

Arizona has some of the best startup costs in the country. Click To Tweet

It’s not only the numbers, though. Relocating in the Grand Canyon state is also a good idea because of the great nature that you can enjoy. This may also be an attractive force for employees who prefer to be on-site, in addition to your remote team.

Here are the top five cities in the Southwest state that can offer great opportunities for your startup’s development.

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If you’re fond of the big city life, Phoenix is the right choice in Arizona. The state’s capital is home to almost two million people today, while the metropolitan area is the 12th largest in the U.S. with its four million citizens. Phoenix has been known in the tech industry for a long time because of Motorola’s base, which used to employ thousands of people in the area.

Phoenix boasts (at least) two great events of high interest for startups. Click To Tweet

The city boasts (at least) two great events of high interest for startups. One of them is Ignite Phoenix, which is held several times per year. It is organized by the Phoenix Innovation Foundation and gathers tech and business professionals from Arizona and beyond. The other important event is the Invest Southwest capital conference, which brings together investors and entrepreneurs from the whole region.


There are a number of incubators and accelerators that you can join such as Seed Spot and Arizona Business Incubation Association. Let’s not forget great co-working spaces like CO+HOOTS and The Department, which can offer networking options and a home for your business.

Besides these factors, Phoenix is also a preferred location for tech datacenters because it is often spared from natural disasters such as tornados, hurricanes, and earthquakes. While it can get quite hot in the Valley of the Sun, the city is a great place to live if you like golf, tennis or hiking. Plus, the Grand Canyon National Park is  just three and a half hours away!


In 2015, Scottsdale was named one of the top places for launching a startup in the U.S. It ranked eighth after places like the Silicon Valley and New York.

Scottsdale was named one of the top places for launching a startup in the U.S. Click To Tweet

One of the biggest reasons for this success is the fact that the Maricopa County city is the home of the SkySong Innovation Center since its opening in 2008. The Center has turned into one of the best startup incubators in the state, attracting budding businesses from the city and beyond. Between 2010 and 2015, there were 13,000 companies founded in Scottsdale, which surpassed $5 million in yearly revenue.

Due to the presence of the Arizona State University, the city is rich in local talent who can be great additions to your startup team. A large portion of the winning businesses from the Arizona Innovation Challenge run by the Arizona Commerce Authority are also located in Scottsdale, including BeckonCall and ClearVoice. If you need a coworking space, there are a number of good ones in town, such as Deskhub and All In Workspace.

The city is located half an hour away from Phoenix, so you can easily commute there for meetings, cultural events, or nightlife. In Scottsdale, you get all the benefits of a metro center such as Phoenix, but without the craziness.

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Known for a number of campuses of the University of Arizona, Tucson is one of the top choices for launching a business in the state. The central city in Pima County has a population of half a million people, while the metropolitan area is inhabited by more than a million. It’s large enough, so it’s not boring, yet not as overwhelming as a capital.

In April 2017, the well-known startup star Remy Arteaga became the director of the McGuire Center for Entrepreneurship at the University of Arizona in Tucson. This is certainly good news for startups in the area because of his success in growing the startup scenes in Boulder, Colorado, and even in the Silicon Valley.


Another major proponent of the startup ecosystem in the city is the NGO Startup Tucson, which organizes regular meetups and larger events. The organization runs the Thryve Program, a social incubator for startups. It also created CoLab Workspace, a new coworking space in town, which you can base your business in. Other shared office options include Connect Coworking and Story Land.

A feature of Tucson's startup ecosystem is the NGO Startup Tucson. Click To Tweet

Living in Tucson also sounds promising. The city hosts a number of arts and cultural events, such as a folk festival and a festival of books, a rodeo, and a modernism week. It has a number of museums and art galleries. Tucson is located in the middle of five mountain ranges, so if you’re a nature lover, there’s a lot to explore around as well.


Flagstaff is a top choice for young people looking for an exciting, smaller city to live in Arizona. Its population is less than 100,000 people, but the modest size should not deceive you.

Flagstaff is a top choice for young people looking for an exciting, smaller city to live in Arizona. Click To Tweet

The city is best known in the startup scene with its impressive biotechnology companies such as POBA Medical, Symple Surgical, SenesTech, Protein Genomics, and Aneuvas. Flagstaff is home to the Northern Arizona University, as well as the Flagstaff Medical Center. If you’re looking to launch a biotechnology or other science-related startup, this is the place. You certainly won’t run short of qualified employees.


There is a great coworking space that you can set your business in – Click. If you need mentorship and guidance, the NACET incubator is also in town. Their programs are especially helpful for biotech startups.

As for the city life, even though Flagstaff is a small place, it boasts a great number of venues for drinks, food, and dances. It’s close to Coconino National Forest, as well as the Grand Canyon, so weekend trips will be worth it.


One of the largest public universities in the country, the Arizona State University, is based in Tempe. This naturally makes the city a top location for startups looking for fresh talent.

Tempe is naturally a top location for startups looking for fresh talent. Click To Tweet

Recently Varsity Tutors, a startup backed by Adam Levine, moved from Scottsdale to Tempe. The news indicated that Tempe is growing its appeal as a startup destination. A few years ago, the Silicon Valley Bank also expanded its location in the city and made substantial investments in local companies.


Some of the good coworking spaces you can choose for your base include the MAC6 Conscious Workspace and Big Bounce, where you can also find help with funding opportunities and mentorship.

Tempe is just half an hour away from central Phoenix, so you have quick access to the state’s capital. Scottsdale is even closer, which means you’ll be located among the top places for startups in the area. You get plenty of entertainment options in Tempe, and you can commute to Phoenix or travel around Arizona’s natural parks for the weekend.

What’s not to love about Arizona?

While overlooked until recently, Arizona is becoming a startup hub in the Southwest. From good investment options and incubator opportunities to top tech talent and great cities to be based in, the Copper State is certainly worth the try for your next startup adventure.

Is your startup based in Arizona? We’d love to hear about your first-hand experience!