Atlanta is heating up, and we’re not just talking about the weather. The southern city famous for its musical talent and humid climate is attracting more and more tech companies from across the country, thanks to a low cost of living and a growing number of financial opportunities.
“It used to be that you would see talent leave and go to [Silicon] Valley, but that doesn’t happen anymore,” says Adam Harrell, co-founder of digital startup Nebo Agency. “Now talent stays here, builds companies here, recruits here, and it works really well.” The entrepreneur, who also acts as executive director of Startup Atlanta, started his business in the city 11 years ago and has seen it grow and change over the years, thanks to an influx of Fortune 500 companies and profitable startups.
The region has seen a 19 percent increase in the number of high-tech jobs between 2003 and 2013, according to Startup Atlanta, a non-profit dedicated to helping local startups. Meanwhile academic institutions are attracting record amounts in innovation funding, taking in nearly $2 billion in 2012, up 22 percent from 2004. Not to be left out, Harrell also notes that last year, Atlanta startups received approximately $590 million in venture capital funding, which is a 20 percent increase from 2014.
“That’s not to discount the wonderful things local startups have done,” says Harrell. “You have a lot of companies that have bootstrapped it and done incredible things.”
One of those successful Atlanta startups doing great things is Pindrop, a cybersecurity firm that recently made headlines after raising $75 million in a Series C funding round, led by Google Capital. When asked about all the recent attention his firm has attracted, Ken Shuman, head of the company’s global communications unit, simply laughs. “Surprised? Not at all. It’s a big deal,” he says.
“You don’t find too many startups from Atlanta grabbing VC money from the Valley—let alone the top VCs in the Valley—so we knew this would be a big national media event,” says Shuman. It also doesn’t hurt either that the company is able to scoop up a lot of great talent from local institutions, he adds, since there isn’t as much competition in Atlanta as compared to Silicon Valley.
Pindrop isn’t the only company that is raking in funding and support. According to AngelList, a database that tracks startups, approximately 1,500 startups in the Atlanta region have an average valuation of $3.9 million.
Eloisa Klementich, managing director of business development at Invest Atlanta (the city’s economic development arm for the city), says the area’s distinct location and accessibility puts it ahead of other competing cities when it comes to startup potential. “Our ability to have the biggest airport in terms of passengers means you can get to 80 percent of the country in two hours,” she says. “You can wake up, fly out to where you need to have your meeting and come back and have your dinner with your family, so it’s the ability to get anywhere very quickly.”
Meanwhile, the city’s strong base of colleges and universities is another boon for startups thinking about moving to the area. “We’re leveraging the talent that is here in Atlanta through just the sheer number of college students,” adds Klementich, noting that there are 275,000 college and university students and six technical colleges in Atlanta.
“You need the engineers, but you also need people with a different skill set for whatever your demand may be,” she says. “Those are the things that are really fueling this opportunity for growth that is bringing companies like Pandora and MailChimp and Scoutmob and Athenahealth.”
Not to mention that Atlanta’s cost of living is well below that of hotspots like San Francisco and New York. “The cost of doing business is very competitive; the ability to live a good life in terms of buying a home, your entertainment facilities, your sports facilities is good. You’ve got all of that in Atlanta.”
Harrell couldn’t agree more, saying the combination of great talent and affordability makes Atlanta the best place for startups. “I always tell folks affordability is great [because] it makes it easier to bootstrap and do all those things. But really, without access to a world class network of resources and large groups of talent and customer base affordability that doesn’t mean a lot.”