United States
Austin
“UT Austin is a global research powerhouse, and it sits at the center of the city’s startup ecosystem. That’s what makes us unique: inventors working with founders working with capital.”
Highlights
Austin’s tech industry totals 16.3% of all jobs, compared to 9% nationally, and despite a drop in global funding in 2023, Austin startups raised more than $1.12 billion in venture capital in the fourth quarter of 2023, up almost 10% from the same quarter in 2022. VC firm Springdale Ventures raised $40 million in its second funding round in December 2023. The same month, Austin-based startup accelerator Capital Factory unveiled a plan to enhance connectivity among entrepreneurs across Texas and significantly increase funding for startups. The plan will generate $600 million to $900 million in additional funding for startups by 2027 through the establishment of the nonprofit Station Texas.
The 2023 Best Cities and States for Startups report from Crowdfund Capital Advisors ranked Austin as the second best U.S. city for startups. In 2023, Apple, IBM, and Tesla announced they were opening facilities in Austin. Supporting the ecosystem, the Austin Chamber of Commerce launched a web-based tool to provide data and resources.
SXSW is the ecosystem’s globally recognized annual flagship event, bringing together internationally known artists, musicians, and technology in a collaborative multi-disciplinary festival. Austin Startup Week takes place each November, and Venture Capital Summit held an Austin event in June. Local funding news includes logistics solution provider Cart.com’s total of $473 million raised over nine rounds and cyberattack prevention startup SpyCloud’s $165.8 million raised over five rounds. Cloud video surveillance company Eagle Eye Networks raised $195 million over five rounds.
Ecosystem by the Numbers
Sub-Sector Strengths
Cleantech
The Electric Reliability Council of Texas is headquartered in Austin, offering Cleantech companies access to one of the largest independent electric grids in the U.S. The CleanTech Fellowship offers Texas MBA students the opportunity to deepen their knowledge. The annual UT Energy Week showcases the University of Texas at Austin’s energy research, and RE+ Texas gathers solar-energy professionals. Climate sensing tech startup Renoster Systems raised $3.75 million in a July 2023 seed round.
Fintech
There are approximately 260 Fintech companies in the greater Austin area. eCommerce growth platform 8fig raised $196.5 million over four rounds. Billd, a provider of financial solutions for commercial subcontractors, closed a $100 million debt facility in November 2023. Integrated financial services provider Unchained raised $108.5 million over six rounds. Fintech DevCon, a conference for Fintech developers is held in Austin in August.
Life Sciences
Employment in Life Sciences in the Austin area is expected to grow at a rate of 6.5% per year through 2025, according to Newmark. Austin’s Life Sciences industry includes over 260 companies, more than 18,000 employees, and 1.6 million square feet of lab space. ACC Bioscience Incubator, Austin’s only bioscience incubator, supports early-stage startups in need of lab space with fully-equipped facilities and infrastructure. Biotech startup Elligo Health Research has raised $196 million over six rounds.
Reasons to Move Your Startup to Austin
Financial Incentives
Texas has no income taxes, and local government and economic development organizations create incentive packages to attract qualified companies. Organizations that move to Austin and create 75+ jobs paying a living wage are eligible for relocation incentives including a reimbursement of up to 3% of wages and a property tax reimbursement of up to 50%. The Texas Skills Development Fund provides grants for workforce training programs and the Texas R&D tax credit offers tax breaks for qualified research.
Access to Capital
With more than 265 VC firms based in Austin supporting a combined portfolio of 6,400 companies, the city offers founders a robust fundraising environment. The Opportunity Austin initiative is dedicated to attracting investors to the ecosystem with plans to develop market assets in Life Sciences, Advanced Manufacturing, and Aerospace Engineering in 2024.
Educated Talent
The University of Texas at Austin undergraduate program was ranked second in the nation for entrepreneurial studies in 2023, with its graduate program ranking #6. Around 60% of adults ages 25 and older hold bachelor’s degrees in Austin, and approximately 22% hold graduate degrees. Austin's educational attainment gender gap is less than 1% — among the lowest in the nation.
Explore more ecosystems
Get connected
Are you interested in diving deeper into this ecosystem? Drop us a message. Our Ambassadors and Partners can plug you in.