Morning Markets: Utah’s tech scene is now into its third generation. That’s exciting.
The Utah tech market is interesting. After appearing to explode into relevance out of nowhere in the last two years, Utah-based tech companies are entering their third generation.
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As we work to better understand what’s going on in the private markets, our goal at Crunchbase News, Utah could constitute a model of sorts for how aspiring tech hubs outside Silicon Valley can grow a set of tech companies. And then another. And then reinvest money from early success back into their own ecosystem.
Let’s talk about what’s going on in Utah.
Utah is on my mind today because I went to a VC-startup dinner last night (breaking my general rule against doing so) with Lucid Software, the makers of Lucidchart, and two of its investors, Meritech and Spectrum. Lucid is based in Utah, and I spent the evening sitting next to Dave Grow, the company’s current COO and President.
Naturally, we riffed on tech writ large and the Utah scene in particular. I’ve covered companies from the state like Qualtrics, Weave, Podium, Divvy, and others. And Crunchbase News has written about Utah more generally a few times in the last two years. So I felt pretty prepared for the nosh.
But what stood out to me after talking to Grow for a few hours wasn’t that there are companies in Utah doing well, everyone knows that. Instead, it was interesting to learn that the companies we’ve gotten to know from the region are being closely followed by yet another group of startups. Things seem hot over on the Silicon Slopes, what Utah-located folks like to call their own tech center.
My impression now is that the Omniture-era of Utah (the first generation) was succeeded by the companies that we best know from the regions (the second generation). Cohort number two has made its mark by almost going public, posting quick revenue growth, raising lots of money, and the like.
But it’s the next group of companies that is most exciting. Grow cited a few firms from the state that have his eye, naming BambooHR (not a very young company, it turns out), Canopy (the tax-related startup, not the cannabis company), and CloudApp (under $10 million in known capital raised to-date).
This sort of generational notion, that companies of one generation invest and boost the next, is how ecosystems become mature. It’s how local venture firms crop up. It’s how Silicon Valley grew into what it is today. It’s a pattern you can see as well in Seattle to some degree, along with Chicago and other areas.
Indeed, the Utah startup scene has become sufficiently well-known (firms based elsewhere use the state as a hub for sales teams), and that it’s becoming very competitive. As SaaS guru and venture investor Jason Lemkin wrote last month:
And that’s a good thing for the workers in the state who are powering a tech scene I don’t think too many people saw coming.
Illustration: Li-Anne Dias.