New York Isn’t a Startup Ecosystem, It’s a Set of Sector Machines

With such a substantial and dense population, it’s difficult to say that New York City has a startup ecosystem as though a monolithic slice of the economy and yet, it’s precisely because of New York’s urban density that it’s a leading example of an advanced startup community.  New York is a rotating set of sector-specific machines that manufacture startups the way the Garment District used to manufacture clothing: it concentrates buyers, trains relevant talent, organizes pertinent regulation, promotes itself for what it is, and aligns money into a square mile or so until the outcome becomes inevitable.

The easiest way to see that this is how New York really works is to stop staring at “NYC raises a lot of venture capital” (true, but boring) and look at what just got funded and why. Checkbox’s $23M Series A was announced out of New York this week, led by Touring Capital, with participation from Peak XV Partners (formerly Sequoia Capital India), Conductive Ventures, Tidal Ventures, Five V Capital, and angels including Jerry Ting.  That is not a random pile of logos, that’s a signal that investors are leaning harder into legal operations as an enterprise workflow category, and that they believe the “front door” problem (intake, triage, measurement, automation) is now big enough (and AI-ready enough) to be a venture-scale wedge.

I write and talk a lot about how cities need to think beyond their borders while specializing after understanding regional strengths and weaknesses.  Many try to be like Silicon Valley while neglecting that it’s a region, not a city, making it all but impossible for a city to replicate what happens thanks to 4 (cities), while revealing that it’s the culture and experiences there that many certain kinds of startups, with fundable outcomes, work well.   It can be hard to grasp that reality without spending time there, so let’s instead look at this other extreme of a city so populated that while you can’t replicate that either, it shows the importance of specialization and focus in civic and economic development.

Checkbox literally frames itself as the “AI Legal Front Door,” capturing requests where business users already work (email, Slack, Teams, Salesforce, intranet), turning the messy human ask into structured work.  That’s New York energy in a sentence: convert chaos into an instrument panel, then sell the dashboard to institutions.

In Checkbox as news pertinent to us all, the story isn’t “LegalTech raised money,” the story is ‘sector specialization is what turns innovation into compounding attention.” Innovation and invention create the sparks. Specialization is how a city turns the spark into a steady burn that attracts the exact people who matter: operators, risk managers, compliance veterans, buyers with budget, and investors who already know how procurement works in that vertical.

Why here was always set up to win for New York startups (whether anyone called them that or not)

New York’s startup scene didn’t start with coworking. It started with the fact that New York is a logistics-and-trust city. For centuries it has been the place where strangers transact at scale: ships, commodities, insurance, credit, media, fashion, real estate, and law. The city’s comparative advantage has never been invention in a vacuum. It’s commercialization under the pressure of exposure (population), immigration, and demand.

You can see it in the big picture; NYCEDC describes the New York metro economy as the largest in the nation, generating about $2 trillion in GDP (roughly 9% of U.S. GDP).  Big economies don’t automatically create startups; they create bureaucracy. But New York’s specific mix (finance, insurance, and media) creates something different (something every city should invest in creating): a permanent demand for tools that reduce risk, compress cycle time, and make decisions auditable.

That’s why New York keeps producing high-frequency categories like fintech, insurtech, regtech, adtech, martech, and now legal ops automation. In New York, the customer isn’t “a customer.” The customer is “a department,” and departments buy outcomes (reduced fraud, faster underwriting, fewer outside counsel bills, better compliance). Checkbox’s pitch is basically stop losing work in Slack threads and email chains; route it, measure it, automate it. New York is one of the few cities where that sentence is both a product spec and a moral philosophy – hence my framing this as an extreme example from which to learn about developing your ecosystem distinct from Silicon Valley: you can’t achieve being either, but you can learn from and replicate parts of what each do well.

If you want the simple way to think of that: Silicon Valley is a casino for technological upside while New York is a risk desk with a very aggressive bonus structure. Both can mint giants, different kinds of giants, as long as you know the “rules” of what’s being done.

Innovation and invention: New York’s long habit of making the future practical

New York has a long history of inventions that are less romantic genius in a barn and more someone got tired of the world being inefficient.

Take the elevator. The safe elevator (the thing that made skyscrapers commercially viable instead of just architectural bravado) is tied to Elisha Otis, who developed the safety mechanism in Yonkers and demonstrated it publicly in New York; it’s impossible to overstate how much that changed urban economics.  New York didn’t just build up, it monetized vertical space.

Take air conditioning. Willis Carrier designed the first modern air-conditioning system in 1902, tied directly to a New York printing problem (humidity messing with paper and color registration).  Not an invention to make summers tolerable, it unlocked modern office density and, later, entire regional economic shifts, because the Media Department needed a solution to runny ink.

Take generalized consumer credit cards. In what you probably perceive to be a finance sector play, Diners Club’s origin story is New York where charging meals across multiple merchants required scaling trust into infrastructure.

Edwin Armstrong’s work is deeply tied to Columbia and New York’s early electronics culture, and FM’s development is part of the city’s broader history of communications infrastructure given the demands of tremendous population underserved by AM.

This is the narrative of an entrepreneurial city.  New York repeatedly invents or scales the tools that make dense economic life possible: vertical transportation, climate control, credit rails, communications. And dense economic life is exactly what modern startup categories like FinTech, Insurtech, and LegalTech serve.

Hopefully Evident: New York is a fintech hub

Empire State Development points out that New York is ranked #2 in fintech investment, citing more than $4.6B in VC across 377 deals in 2023, and saying New York is home to 1,500+ active fintech startups (with 115 unicorns). Even if you want to argue about rankings (people love arguing about rankings so please, join the fray and debate), the underlying reality that the city is stacked with financial institutions, market infrastructure players, and buyers who can deploy fintech inside real operations.

The thing to appreciate for founders and the development of your ecosystem is that Fintech in New York isn’t a theme, it’s the implication of the adjacency. You have the exchanges, the banks, the asset managers, the payments networks, the compliance apparatus, the auditors, and the armies of analysts who know exactly where money leaks out of a system. That means founders don’t have to guess what matters, they can walk into the problem.  When mentoring throughout the world, finding sufficient customers to talk to so as to validate an idea, remains one of founders greatest hurdles; hopefully you can see why I want your city to A) focus on what it does well and B) promotes itself for what it is, founders fail to a great extent because of both sides of this coin – a coin cities can fund.

You see this in the way New York fintech companies scale: expense management, fraud, compliance, payments orchestration, lending infrastructure, wealth tech, risk analytics. Ramp (a New York-based fintech) has a $500M late-stage round valuing it at $22.5B and explicitly ties growth to product expansion including autonomous AI agents for finance workflow. That’s not a cool app, that’s software serving the finance department from the inside from explicitly where it makes sense that would be the case.

Crucially, New York has sector accelerators that exist because the buyers are there. The FinTech Innovation Lab (run by the Partnership Fund for New York City and Accenture) is explicit about its model: put startups in a 12-week sprint with access to senior leadership at dozens of financial institutions; it tracks alumni scale (hundreds of alumni, hundreds of proofs of concept, billions raised) and runs both fintech and insurtech tracks.  That’s customer development as a sport; exactly what we should expect of Accelerators and precisely why Founder Institute has been on the ground here for years, getting founders to the stage appropriate to scale.

Evan Wong, Co-founder & CEO of Checkbox, put it in a way founders share after they’ve survived the first few years, “I had the most incredible learning experience. I would definitely not be the founder I am today without the Founder Institute being my backbone.”

New York is also an insurtech hub (because insurance is finance’s more paranoid sibling)

Insurance is one of those sectors everyone uses and almost no one understands, which is why it keeps producing venture-scale opportunities: underwriting, claims, fraud, distribution, reinsurance, compliance, catastrophe modeling, cyber, and now AI-driven pricing and risk selection.

The city’s advantage here is also structural; New York has major insurance carriers, brokers, and professional services density, plus the regulatory environment that forces discipline. The FinTech Innovation Lab runs that insurtech track in New York in parallel with fintech. So zoom out for a moment and download this paper from Milken Institute because it’s study like this, into trends, that everyone should be doing to work out how to advance your own ecosystem, lean into New York, or to figure out where to launch or invest in a venture of your own.

Whether the market is hot or cold in a given year, underlying drivers persist.  In this case, just as is the case with finance here, insurance is paperwork + probabilistic risk + legacy systems = three things software (and now AI) loves to attack and which will always be opportunity here.

New York’s secret weapon in insurtech is the same as in fintech: you can hire someone who has actually done the job inside a carrier, broker, MGA, or compliance function.  It’s frequently pointed out that the average age of a successful founder is 44 because of inside experience and connections; well, you can put those in place with cofounders or an experienced team, what you can’t do is pretend and make it up as you go. Sector experience is the difference between “we automate insurance” and “we reduce cycle time for FNOL claims triage and cut leakage by X%;” One is a pitch and the other is revenue.

Legaltech is up for grabs and New York is one of the few places that can actually win it

First, a reality for legaltech founders: law is not “behind,” law is cautious by design. The solutions are in risk allocation with consequences.  I was in Croatia not long ago and one of the more intriguing startups was working on LegalTech for Europe; to which I impressed, “how do you scale to the other countries while handling the never ending changes in local law?”

The legaltech wave that matters now isn’t a marketplace for lawyers or another contract template, it’s operational infrastructure for in-house teams, and increasingly, AI-native compliance and regulatory workflow.  Not easy, which is why Checkbox is a bellweather both a case study and opportunity.

This Series A announcement from Checkbox is basically a manifesto about legal teams drowning in ad hoc intake channels and lacking visibility; the product is positioned as orchestration plus automation plus measurement; exactly the kind of work New York institutions will pay for, because legal spend is enormous, scrutiny is constant, and outside counsel bills are the tax you pay for having no internal system.  

Another recent signal is even more New York-coded: Legal AI startup Norm Ai secured a $50M investment from Blackstone and announced the creation of an independent law firm, Norm Law LLP, headquartered in New York, explicitly aimed at “AI-native” legal services for financial services clients.  Read that again: an AI company plus a major financial institution investor plus a New York-based law firm wrapper. That’s a bet that the boundary between software and legal service delivery is getting redrawn, and it’s getting redrawn where finance and regulation collide hardest.

Meanwhile, the biggest legal AI platforms are racing to integrate authoritative legal content, not just generate plausible text. For example, LexisNexis partnered with Harvey (AI in contract analysis, due diligence, compliance), letting Harvey users access LexisNexis content directly inside the workflow, an explicit move to solve the “your AI can’t cite the law reliably” problem.  Granted, not based in New York, but we won’t hold that against them.

That being the case is kind of why legaltech is “up for grabs.” There is no universally adopted operating system for legal work the way finance has ERPs and CRMs. Legal departments are a Frankenstein stack of email, intake forms, CLMs, e-billing, knowledge bases, outside counsel portals, and whatever someone bought after a conference three years ago.   In the incredible accomplishment of companies like Harvey and Checkbox, we see the culture, economy, and experience of Silicon Valley (Harvey) while also witnessing the impact of New York (Checkbox); both more than capable in their own right but for very different reasons as hubs of innovation and the future of our economy.

New York is one of the few places with enough density of (1) legal buyers, (2) regulated industry clients, (3) legal ops talent, (4) enterprise budgets, and (5) investors who understand compliance cycles to turn that wedge into specific categories and they provide us all with some of the best examples of why your city should be doing the same.