United States

Austin

Austin has been a tech and startup hub for a couple of decades, but with the overwhelming amount of talent and capital now available, we are now considered the third leg of the stool in the startup world, along with Silicon Valley and Boston.

Mitch Jacobson
Executive Director, ATI, SW-ICORPS, UT LaunchPad

Highlights

With low taxes, sunny weather, a vibrant cultural scene, and comparatively low cost of living, Austin is quickly becoming one of the leading startup ecosystems in the U.S. Austin ranked first in CompTIA’s 2020 Tech Town USA index, which praised Austin as a “favorable alternative” to the Bay Area and New York for startups. The city is also cemented as a tech hub, with Tesla among the 10 tech companies that relocated to the city in 2021 alone. Venture funding boomed in Austin in 2021, with local startups closing 387 deals valued at a record-setting $4.9 billion, according to PitchBook data. That represents 211% growth compared to 2020. Austin had five of the top 10 venture capital funding deals in Texas in that year, with notable funding rounds including ICON Technology’s $207 million Series B in August and Elligo Health Research’s $135 million Series E in September. LiveOak Venture Partners, which makes early-stage investments in technology and technology-driven services, raised its largest fund to date, $210 million, in late 2021. The city is also home to SXSW South by Southwest, one of the largest and most anticipated tech events of the year, and Austin Startup Week attracts thousands of visitors from around the world. Local government also fosters innovation through events such as Austin Fast Start, a pitch competition for early-stage startups from the City of Austin’s Economic Development Department in partnership with the Austin Young Chamber.

Ecosystem by the numbers

TOTAL EARLY STAGE FUNDING
(2019H2-2021)
$1.8 bn
GLOBAL AVG.
$687 m
ECOSYSTEM VALUE
(2019H2-2021)
$42 bn
GLOBAL AVG.
$28.6 bn
MEDIAN SEED ROUND (2019H2-2021)
$990 k
GLOBAL AVG.
$671 k
MEDIAN SERIES A ROUND (2019H2-2021)
$6.5 m
GLOBAL AVG.
$4.7 m
SOFT. ENGINEER SALARY (2021)
$85 k
GLOBAL AVG.
$46 k
6.9
GLOBAL AVG.
11.3
280
GLOBAL AVG.
101
Amount ($B)
Count (#)

Exits

(2017-2021)
EARLY-STAGE FUNDING GROWTH TIER (2018/19 VS. 2020/21)
5
Calculated on a scale of
1 (lowest) to 10 (highest)
TOTAL VC FUNDING (2017-2021)
$10 bn
GLOBAL AVG.
$4.5 bn
TIME TO EXIT (2017-2021)
9 years
GLOBAL AVG.
9.4 years

Sub-Sector Strengths

Cybersecurity

In 2020, 7% of U.S. cybersecurity funding was captured by Texas, with many companies in the sub-sector clustered in Austin. The Cybersecurity Boot Camp at UT Austin is training local talent for jobs in the field. SparkCognition, which creates AI software solutions including products for cybersecurity, closed a $123 million Series D in January 2022 at a valuation of more than $1.4 billion, and protective intelligence software platform company Ontic raised a $40 million Series B in November 2021.

Cleantech

Austin is a Cleantech hub, with over 200 companies that employ approximately 20,000 people in the sub-sector. This includes carbon capture startup Earthly Labs, which was acquired by Chart Industries for $62 million in December 2021. Founded in 2001, Austin’s ATI Clean Energy Incubator (CEI) is one of the longest-established energy and Cleantech incubators in the U.S, and its parent institution, the University of Texas, claims to do more energy research than any other university in the world.

Reasons to move your startup to Austin

Business Friendly Environment

Austin’s tech community is welcoming and collaborative, with many established players willing to serve as resources for anyone new or thinking of moving to the city. More concretely, Texas is one of seven states in the U.S. with no corporate income tax, allowing startups to benefit from increased purchasing power, lower operating costs, and potentially higher profits.

Educated Workforce

The University of Texas is one of the 40 best universities in the world and among the top 20 American universities, as ranked by Times Higher Education. It is known for producing engineers and developers, as well as turning out graduates specialized in pharmaceuticals, biotech, and green energy.

Startup Community

Startup Genome
Partners

3 Day Startup
Austin Technology Incubator
BuiltIN
Capital Factory
Central Texas Angel Network
St. Edward’s University
Tech Ranch
Techstars Austin
University of Texas Austin
WeWork

Get connected

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