No one loves the middle on a plane. In a car. Or on a train. No, you’re not insane. But now the middle is cool again!
Yes, pardon the riff on Green Eggs and Ham. I’m just full of childish joy at how many great non-traditional tech hubs ranked on CBRE’s 2020 Scoring Tech Talent list.
Cost of living, tech concentration, new talent growth, and many other elements went into determining the rankings. More about these Mighty Metropoles (Metropolii? Metropolises?) later in this issue.
Among those bustling cities, Austin is certainly “having a moment,” as Ezra Galston of Starting Line VC tweeted last week. The city recently tripled up on billion-dollar investments, which you can also read more about below.
And not to be outdone, our friends in Nashville continue to work hard, play hard, and produce startups driving innovation in healthcare, education, and beyond. Learn more about the happenings in our Unvalley Spotlight of Music City USA—plus a chance for ten days of innovation and inspiration from the comfort of your own home.
You’ll find it all here in this week’s Spark.
In This Issue:
- 💥Nashville’s Triple-G Formula
- 🍴Equity = More Pie
- 🌻Middle Means More
THIS WEEK’S TOP STORIES
🤔Does“Middle” Mean “More?”
Oreos. Naptime. The Empire Strikes Back. Often, the middle is the best part! And now that includes Middle America.
According to real estate and investment firm CBRE, the Mighty Middle is officially a top collective place for tech talent. Cities throughout our region were ranked all over the 2020 Scoring Tech Talent list. Some heavy hitters in the top 10 included:
- Washington DC (#2)
- Austin TX (#6)
- Denver CO (#7)
- Atlanta GA (#9)
Cities like these will continue to play a rising role now and in the future of the tech economy. Tech talent is migrating to these affordable cities and will be integral to economic recovery from COVID-19 and beyond.
Technology continues to integrate into every industry, and employers rely on tech professionals to innovate. Explore insights into how tech labor trends inform decisions and influence economic growth and real estate. Download our #TechTalent report now: https://t.co/aHKIbmggsC pic.twitter.com/YrdtcjzQtx
— CBRE (@CBRE) July 15, 2020
There’s a lot of land out there, and a lot of talent to fill it without emptying their savings accounts. That extends to businesses, too.
The new remote work reality is projected to shift at least 49% of business spending out of traditional tech hubs into the open air, where innovation is free-range, and opportunity isn’t tethered to a zip code. We’re excited to see next steps for talent as this growing trend continues.
🍴Equity = More Pie
Progress is a journey, and we’re starting to travel faster. But that hasn’t always been true, due to the tech industry’s traditional venture capital systems.
It’s true that global venture capital funding has dropped 20% since the start of the pandemic. But even when VCs were at peak activity, investment decisions were still biased, according to new data from the Kaufmann Foundation:
- 83% of entrepreneurs have no access to bank loans or venture capital when they start a business.
- Black-owned businesses start with 3x less funding.
- Men are 60% more likely to secure funding than women.
In response to this human bias, innovators between the coasts are rolling up their sleeves and turning to their communities.
Platforms like iFundWomen help female founders get coaching, capital, and more. Groups and individuals like Harlem Capital, 1871, Backstage Capital’s Arlan Hamilton, and Kapor Capital’s Brian Dixon are also continuing their missions to elevate underserved founders.
“It was crazy to me that 90% of #venture #funding was going to white men, when that is not how #innovation, intelligence, and drive is dispersed in the real world.” – @ArlanWasHere. Read more on @ainsleyoc interview with Arlan Hamilton here: https://t.co/76nlKuVFVp
— The Startup Ladies (@IamAStartupLady) June 13, 2020
They’re among more than 200 accelerators, incubators, investors, and more working across the US to help minority-owned startups grow and scale. This brings more capital, talent, and innovation off the sidelines and into play in the middle of the country. That can only mean…
More pie for everyone.
As more people get a seat at the table, it becomes safer to fail…and easier to succeed. Yummy!
🏇Austin Tech Triple Win
Startup scenes are like a big family. There’s some healthy competition, but at the end of the day, if one company succeeds, everyone wins.
Some of this is the added recognition for a beloved hometown, but it’s also because a big exit usually leads to a significant investment back into the community. So keep your eye on Austin, because the needle keeps moving. Or, as Ezra Gaston of Starting Line VC tweeted, “Austin’s having a moment.”
BigCommerce – $6.5B
Yeti – $4.5B
Vital Farms – $1.75B
Austin is having a moment
— Ezra Galston (@EzraMoGee) August 7, 2020
Three huge Austin exits have occurred in recent months. Two of those were IPOs.
The largest was $6.6 billion for online shopping company BigCommerce. Sustainable farming company Vital Farms also had a big IPO win, as stocks jumped 60%, earning it a market cap. And drinkware/cooler manufacturer YETI managed to increase Q2 earnings by 7% over 2019, despite a dismal April.
So yeah, Austin is definitely having a moment. But data shows it’s setting an example for the many non-traditional hubs experiencing record-smashing levels of breakout success.
Speaking of a breakout, startup founders know it’s very possible to make your own luck. Last year tech companies between the coasts like Formstack and Boardable applied for and won Tech Culture Awards.
The result was plenty of media coverage and lots of talent and business referrals from the Powderkeg community. Make sure you keep an eye out for this year’s awards and get ready to seize your moment to shine.
EXPLODING WITH OPPORTUNITY
Top fundings, acquisitions, and IPOs between the coasts.
Ann Arbor, MI
- Malicious ad-fighting firm Clean.io raised $5 million in Series A financing, led by Tribeca Venture Partners.
- The online content creator platform Special raised $2.26M in its seed funding round thanks to Next Frontier’s lead.
- Catapult raised $2.6M for developing workflow software thanks to several undisclosed individuals from a private equity group.
- E-commerce upstart Cashdop raised $2.7 million with Harlem Capital leading the round.
- Health tech companies Teladoc and Livongo merged into a $37 billion remote-health company.
- InsurTech startup AgentSync raised $4.4 million with Caffeinated Capital and investor Elad Gil leading the seed round.
Jersey City, NJ
- Sift Healthcare secured $2.8 Million in funding by Rock River Capital Partners and the Winnebago Seed Fund
- CardioMech raised $18.5M from undisclosed investor to test heart valve device in humans
- Joshin raised $1.5M in seed funding. The round was led by Anthemis, Sure Ventures, and M25.
- Security software company GreyNoise announced a $4.8M seed round investment with CRV leading the round.
- Adaptive Phage Therapeutics Inc. raised $7M to attack superbugs, with $1.75 million from Mayo Clinic.
STARTUPS STILL HIRING
Know someone looking for a new gig? The economy is unpredictable right now, but startups in the middle of the country are still hiring.
Check out the Top Powderkeg Picks below:
- Greenlight Guru is a medical device quality management company hiring an account executive and a candidate experience specialist.
- CleanSlate Technology Group provides enterprise tech consulting services, hiring solutions and cloud architects, consultants in different programming languages, a senior business development professional and more.
- Callibrity is a custom software developer hiring Java and .NET developers.
- Narwal is a team of automation and data experts hiring engineers, developers, administrators, and more.
- Blueprint Title is a tool to streamline residential real estate closings, hiring title officers, escrow officers, business development professionals, and more.
- Built Technologies is a construction financing platform hiring bilingual customer support reps, operations analysts, a Talent Experience Director, a Head of Finance, and many other roles in-between.
- naviHealth is a tool to preserve the post-acute care continuum hiring inpatient care coordinators, product managers, quality consultants, a national accounts director, and more.
Remote or Multiple Locations
- TitleCapture is a closing cost estimating platform hiring for several sales executive and manager roles.
- Unum ID is an identity verification tool hiring multiple senior developers and a VP of Enterprise Sales.
Nashville, TN: Tech Startup Explosion Thanks to Grit, Growth…& Garth Brooks?
In this section of the Spark, we illuminate some of the biggest opportunities in tech beyond Silicon Valley. This week, we’re featuring Nashville, with Charlotte on the list for next week!
Nashville has been a rising star on the tech hub stage for a while now, including being ranked as the #3 emerging tech hub in 2019 by RentCafe. The city’s 22.7% increase in tech job growth is accompanied by the relocation of many Silicon Valley startups like Lyft, PostMates, and Eventbrite.
For some of those transplants, moving to the neighborhood comes with a major change of pace. Aaron Salow, founder and CEO of XOi Technologies, says, “The core value Nashville’s tech community brings to the table is relationships. It’s about giving without expectation.”
Luckily, the community means Nashville’s startups get as good as they give. Powderkeg learned in our 2018 Tennessee Tech Census that 24% of the city’s startups grew revenue more than 80% in 2017.
This growth boom has also been accompanied by some major exits:
- $460 million: Health care services company Intermedix acquisition by R1 (2018)
- $34 million: Mobile health records company Entrada was acquired by Quality Systems (2017)
- $20 million: IT consulting firm Zycron to BG Staffing (2017)
With an $84B healthcare economy in Nashville, the pandemic has only driven more tech startup growth, while deep hospitality and music roots keep the metropolis poised to recover any COVID losses easy as a song. 71,000+ jobs in the city are directly related to the hospitality industry, and according to the Census Bureau, that’s not even the leading sector of employment:
- Education & Health Services = 24.0%
- Trade, Transportation & Utilities = 17.9%
- Professional & Business Services = 13.0%
- Leisure & Hospitality = 12.2%
- Government = 4.1%
- Manufacturing = 7.2%
- Financial Activities 7.1%
- Construction 6.1%
- Information 3.1%
No matter what vertical attracts your fancy, Nashville’s strong, sweet Southern culture permeates them all. “We’re always just getting started. It’s always finding the next great challenge and being excited about what we’re doing,” says Jerry Bostelman, CEO & Founding Partner of Vaco.
Convinced you want to learn more about Nashville?
Check out the 36|86 Festival over the next two weeks from August 17-28. Over 10 days and 50+ sessions, speakers, and leaders from across the community will convene to share insight and inspire innovation. Keep an eye out to connect with Matt, who will be hosting the Build track of the virtual conference.
That includes a “36 Questions” session with music legend Garth Brooks, whose entrepreneurial ingenuity has helped his fans cope with the challenges of the pandemic. Don’t miss it!
Are you looking for more news in tech between the coasts? It’s free to sign up for our hand-curated newsletter, The Spark, delivered to your inbox each week with the tech news outside Silicon Valley you need to know. Sign up here!