San Antonio continues to struggle to turn its research, military expertise and workforce into homegrown startups that attract venture capital, a new report says.
The number of new startups in the city fell 53% in 2025 from the previous year, and venture funding plunged nearly 80%, according to the first San Antonio State of Innovation report, which was released today.
The report, produced by four of the city’s tech and innovation hubs and regional economic development corporation Greater SATX, analyzed nine “innovation-intensive” sectors, including biotech, software, cyber, defense and advanced manufacturing.
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The San Antonio metro had 55,054 people employed in those sectors in 2025, up 2.5% from the previous year. Their share of local employment was 19% below the national benchmark, putting San Antonio ninth among 10 comparable cities.
“The report should serve as a wake-up <a href="https://bitcomme.com/lemaitre-vascular-q3-earnings-call-highlights-2/” title=”LeMaitre Vascular Q3 Earnings Call Highlights”>call for entrepreneurs in our city,” said John Dickson, a San Antonio cybersecurity executive who led the Denim Group until it was sold to Coalfire in 2021. “As they say, admitting you have a problem is the first step.”
He described the findings as grim and said a weak pipeline of startups has contributed to the problem.
New startups fell to 23 from 49. That figure came from Crunchbase, which tracks businesses with high-growth potential. A separate D&B Hoovers measure counted 1,759 companies founded across the industries in 2025, up 3.4%.
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“Employment is growing, but San Antonio still has significant room to deepen the concentration of its innovation economy,” the report said. It also found that the number of business locations working in those industries fell nearly 2% to 3,626.
Venture funding fell from $141 million to $31 million. The report called the decline “an important signal” that “should be read as one indicator of the broader capital environment rather than a standalone verdict on ecosystem health.”
The number of patents granted in the region fell 24% to 491 compared with 648 in 2024, a five-year high.
The region holds $2.5 billion in federal research and development contracts, concentrated primarily around Southwest Research Institute. SwRI’s ZIP code has $1.59 billion in federal contracts. It is followed by Port San Antonio with about $224 million.
Described as a baseline, the report also outlined recommendations for growing the sector, including investing in industry hubs around the city, building connections, growing venture capacity and promoting the region. It recommends a dedicated Innovation Promotion Fund but does not propose an amount.
