New Biotech Hubs: Where US Startups Are Building Now
For most of modern biotech history the answer to where a company should be was two cities. That is loosening. Capital and infrastructure are collecting in places that were not on the map five years ago, including Miami, Houston around MD Anderson, and a set of Midwestern states. For a founder who cannot get a meeting on the established coasts, the practical consequence is that the meeting may exist somewhere else.
The observation comes from Jeremy Levin and Sara Jane Demy, in a conversation about where biotech money has gone now that conventional venture rounds have become harder to close.
Why are new biotech hubs forming now?
Because the capital moved first and the infrastructure is following it. Levin's account is that family offices in several parts of the country have pooled into groups deploying directly rather than through funds, which puts significant capital in cities that never had a fund cluster. Where capital concentrates, service providers, experienced operators and eventually talent follow.
This is a slower process than a funding announcement and a more durable one. A hub is not created by a single anchor investor; it forms when a founder can raise, hire and find a contract manufacturer without leaving.
Where are the new hubs?
Levin names Miami directly, as somewhere a founder can approach and ask what they are working on. The organization is the Miami Biotech Collective, a South Florida community of biotech executives and investors; Levin refers to it in conversation as the Miami Collective.
Go and try and open up the doors at, let's say, the Miami Collective. Ask them about what they're doing.
Demy adds a second, and it is the most legible of the set. Houston has a cluster forming around a major cancer center.
another one growing up around MD Anderson
That case is easy to reason about: a major cancer center supplies clinical capability, translational research and a patient population, which is most of what an oncology company needs within reach. She then points past the obvious geography entirely.
some surprising in Midwestern states that are starting to bubble up
Surprising is the operative word. These are not places with a biotech reputation to trade on, which means whatever is forming there is forming on economics rather than on brand. That is the opposite of how capability gets built somewhere like China, where Levin describes a written and sequenced plan rather than an emergent one.
What does a hub actually have to provide?
Three things, and capital is only the first. A founder needs money, people who have done it before, and physical capability such as manufacturing and clinical infrastructure. Boston and the Bay Area supply all three densely, which is why they held their position for so long even as costs rose.
The emerging hubs are uneven across those three. A city with active family-office capital and an academic medical center may still be thin on operators who have taken a company through an approval. That is the gap a founder should assess honestly rather than assuming presence of capital implies presence of everything else.
Why would a founder leave an established hub?
Cost is the obvious answer, and Demy points at the same pressure from a different direction. She is running into it with her own flagship event.
My big meeting biotech showcase is having issues because of the cost of being in San Francisco, the lack of funding for smaller companies.
That is worth reading twice, because it is a measurement rather than an opinion. The person who convenes the industry's investor meeting in San Francisco is describing the cost of San Francisco as a live problem for that meeting, and pairing it with the funding squeeze on exactly the small companies who most need to attend. When both the cost of presence rises and the capital available falls, the calculation that held companies in expensive cities weakens from both ends at once.
So we're grappling with how we adjust to that.
The second reason is access. In a dense hub a first-time founder competes for attention with hundreds of others. In a forming one, the people deploying capital are reachable, which is precisely the behavior Levin is recommending.
So I think be innovative is my message to the entrepreneurs about your business structure.
How does this connect to how companies are funded?
Directly. The reason these hubs matter now is that the conventional path has narrowed, which we cover in our piece on family offices as a biotech capital source, and in the companion piece on non-dilutive funding. Geography and capital structure are the same question viewed from two angles: if the money is no longer concentrated in two cities, neither are the companies.
What is the caution?
Hub formation is frequently announced and less frequently completed. Cities have been declaring themselves the next biotech center for two decades, and most did not become one, because capital arrived without the operator depth or the manufacturing base to convert it. The signal to weight is not a fund launch or a ribbon-cutting; it is whether companies founded there are still there three financing rounds later.
The honest test is retention rather than formation. Any city can attract a first financing; the ones that become hubs are the ones where the second and third rounds can also be raised without relocating, because that is the point at which a founder otherwise moves and takes the company with them. On that measure the established coasts still hold a large advantage, and pretending otherwise does a founder no favors.
Miami, Houston and the Midwest are early on that curve. What has changed is that the question is now worth asking, which it was not particularly recently.
This account is drawn from the recorded, on-the-record conversation on Open Door Salon with Jeremy Levin and Sara Jane Demy, hosted by Lori Ellis. Interested in sponsoring Open Door Salon?