North Carolina is becoming a top relocation spot for techies fleeing big metros in the wake of the coronavirus pandemic.
Just ask Jason Caplain, partner at Bull City Ventures.
In over two decades working as a venture capitalist in the Triangle, he says he’s never seen such a flood of talent into the region.
“I’ve had more conversations over the last six months with Bay Area people moving, or moved, to Raleigh-Durham than my last 20 years as a VC,” he says. “The influx of talent is real. This is a moment for North Carolina.”
The region is luring a wide swath of talent, he says.
“It’s heavy on software developers,” but serial entrepreneurs and “several C-level execs at high profile public companies” are in talks to move as well.
“They recognize the expense of the Bay Area,” Caplain says, “and ask, ‘Why pay for all that? I can be here, and it costs a lot less.’”
The pandemic has triggered a tech migration. As remote working becomes the norm and people become disgruntled with the cost of living and high taxes in places like California and New York, local VCs and execs say the Triangle – alongside Austin and Atlanta — is among the beneficiaries.
A mid-size metro, with lots of job opportunities, high quality of life, low cost of living, and a bustling startup scene, is a big draw for transplants, says Michael Haley, Wake County Economic Development’s executive director.
Meanwhile, Wake County is growing, on average, by 64 people every day (with 43 moving to the area and 21 born in the county).
“We expect this trend to continue,” says Haley.
Part of the Triangle’s appeal as a newer tech hub, adds Caplain, is the perception that the region is still relatively young and untapped.
“I’ve heard some people say, Austin’s kind of already arrived. They don’t want to go to the one that’s already arrived; they want to come to the next up-and-coming coming, and that’s Raleigh-Durham.”
Downtown Raleigh, and the Triangle at-large, has been steadily building its own bustling tech ecosystem over the past several years.
Cisco, IBM, GlaxoSmithKline, Red Hat, and SAS all call Raleigh home. The Research Triangle Park, home to 200 companies and counting, is only a 20-minute drive to the west, cementing the region’s status as a “newer tech hub.”
Then there’s Durham with its own buzzing startup scene; and Holly Springs, home to international pharmaceutical company Seqirus; and smaller towns like Garner and Chapel Hill, with plenty of entrepreneurs.
Over the last year, the region has quietly secured several out-of-state companies.
The same week Oracle relocated to Austin, the publicly-traded New York technology firm Phreesia quietly shifted its headquarters to Raleigh in a securities filing.
Earlier this year, Envestnet, a financial technology company headquartered in Chicago, expanded its Raleigh presence by adding 148 new jobs.
Microsoft created 500 new jobs, expanding the company’s growing presence in Morrisville.
Interestingly, the Triangle’s biggest wins in recent years haven’t come from luring big firms, like Amazon HQ2 or more recently Oracle.
Instead, they’ve come from within.
In April, communications software firm Bandwidth, founded in a Raleigh guest bedroom 20 years ago, announced plans to expand its headquarters, bringing nearly 1,200 new jobs and more than $32 million in capital investment.
In October, Durham-based BioAgilytix picked its hometown over competing sites in Massachusetts for a massive, $61.5 million, 878-job project.
Raleigh cloud tech startup Pendo is another example. In less than eight years, it’s reached the rarified status of “unicorn,” passing the $1 billion valuation mark, and is on track to employ 1,000 people worldwide by the end of 2023. 600 new jobs are set to be created in Raleigh alone.
Meanwhile, Wake County’s project pipeline remains “very strong. It is leading 44 active projects representing over 15,600 potential jobs and $3.8 billion of potential capital investment.
Looking ahead to 2021
This confluence of conditions is only making the Triangle region more attractive to top tech talent, boosting the region’s prospects as a whole, says Adam Klein, chief strategist at Durham’s American Underground (AU). AU is one of seven Google for Entrepreneurs Tech Hubs in North America and houses more than 275 startups.
He says he’s seeing a major influx of serial entrepreneurs — people who have done this “multiple times,” and are choosing the region to build “their third, fourth, fifth company” in the area.
“That sort of senior level of talent is not necessarily what I’ve seen before,” he says.
That, in turn, has a knock-on effect, with a new set of “peers, advisors, mentors, investors” coming into the region.
Despite the crisis, AU has maintained its membership. This year, its headquartered companies raised $108.7 million in total funding – more than $29.5 the year prior, according to its annual report released this month.
“The pandemic has driven growth for a number of our companies,” says Klein. “I’m seeing them hire pretty aggressively right now, getting ready for a pretty big next year.”
Meanwhile, VCs say there are even new funds popping up that serve as “green shoots with more capital,” which will soon be available to founders.
Klein suspects it’s just a matter of time before the Triangle cements its status as a bigger player on the broader tech scene.
“My suspicion is that, while I may not have seen the same announcements that Austin’s had over the last year, the next three to five years are going to be very good for this region. We’re just going to pick up even more.”