Venture funding for tech firms spiking in North Carolina’s Research Triangle

by WorldTribune Staff, October 30, 2018

A booming tech hub near Raleigh is only one reason venture funding for startups in North Carolina have reached $2.57 billion so far in 2018, a report said.

The 2018 numbers are up 154 percent from 2017 ($1.01 billion) and a whopping 400 percent from 2013, when startups in the Tarheel State raised a combined $516.5 million, according to data cited by the San Francisco-based firm Crunchbase.

“I believe we’re the best kept secret in VC (venture capital),” David Gardner, managing partner of Cary-based Cofounders Capital, told Crunchbase News. “I don’t have to leave even the area to find deals. But I don’t think the country has caught up yet with what a hotbed this place is.”

Forbes has ranked Raleigh and the state’s Research Triangle second in its annual list of “Best Places for Business and Careers”.

Forbes highlighted Raleigh’s “strong economy and educated workforce” and also pointed to its business costs, which are 14 percent below the national average according to Moody’s Analytics.

North Carolina companies have been involved in a number of major deals recently, Mary Ann Azevedo noted in an Oct. 29 report for Crunchbase:

  • On Oct. 26, Cary-based Epic Games closed a $1.25 billion venture round.
  • On Oct. 28, IBM announced plans to acquire Raleigh-based Red Hat for $34 billion in the largest software acquisition ever.
  • In September, Pendo raised a $50 million Series D led by Sapphire Ventures and Prescient brought in $50 million in July.

“We’ve done a great job of building a startup community,” Gardner told Crunchbase. “It’s cool to be an entrepreneur now. As evidence of that, entrepreneurship is the fastest-growing degree at local universities. But kids don’t want to be a cog in someone else’s machine. Right now the best and brightest want do their own thing.”

Pendo founder and CEO Todd Olson said the region has seen “a tremendous increase in the number of new startups, as well as new venture firms and incubators.”

Olson said the Raleigh and Durham downtown areas have improved dramatically, creating an “attractive enough environment to keep some of the young people here.”

Gardner said that it would be a “mixed blessing” if a mega company such as Amazon or Apple were to open new locations in North Carolina.

“If either of them were to locate here, it would be great to have the jobs, tax bases, and credibility in the area,” Gardner told Crunchbase. “At the same time, one of the great things about this area is the low crime, great schools and healthcare, low pollution and low traffic. As you get these mega companies starting to come here, you start to compromise some of those things.”


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