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Funding To Atlanta Hit A 5-Year High In 2020 As The City Produces Unicorns

While Florida and Texas have been at the center of the conversation around the Silicon Valley exodus and tech’s next big hub, a city in Georgia has quietly been producing unicorns at an unprecedented pace: Atlanta.

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The state’s largest city has produced at least three unicorns in the past six months, with Greenlight, SalesLoft and Calendly all reaching or surpassing the $1 billion valuation mark. A look back at 2020 finds yet another unicorn with fintech startup Bakkt reaching the coveted status in March. 

While Silicon Valley churns out unicorn-valuation startups at a frequent clip, seeing one city produce numerous billion-dollar companies in a short time frame is pretty rare. And that could help the future of Atlanta’s startup ecosystem, particularly during a time of remote work and more discussions of building companies outside of traditional tech cities like San Francisco and New York.

“I think any success stories create more gravitational pull to the city,” David Cummings, co-founder of Atlanta-based robotic lawnmower startup Greenzie, said in an interview with Crunchbase News. Cummings also co-founded and invested in SalesLoft and invested in Calendly.

Cummings has been part of a number of success stories in Atlanta. He started a software company when he was an undergraduate at Duke University, and its biggest customer was in Atlanta. While most of his friends made the move to New York or California after graduation, he opted to move to Atlanta to be in the same office as his customer.

“Really, from an Atlanta point of view, it was obvious there was something special going on,” Cummings said. “Something undiscovered at the time. It wasn’t the most obvious place. But being there with an incredible community and, again, the technical talent … it was 100 percent the right move.”

Since then, he started and sold another company and used the money to start the Atlanta Tech Village, the co-working space and community that’s become the city’s tech hub. Cummings co-founded and invested in SalesLoft there, and Calendly also called the Tech Village home. Cummings invested in Calendly’s seed round, and earlier this week the company announced a $350 million Series A at a $3 billion valuation. The funding is Calendly’s first since raising its $550,000 seed round led by Atlanta Ventures in 2014.

Atlanta’s startup growth isn’t just due to young companies setting up shop in the city and raising money, but rather is “companies with significant revenue growing,” according to Metro Atlanta Chamber’s Chief Innovation Officer Alex Gonzalez. 

Funding for venture-backed startups based in the greater Atlanta area hit a five-year high last year, reaching nearly $2 billion across 188 deals, according to preliminary Crunchbase data.

“There’s that tangible aspect of companies and money, but the other thing is the infrastructure has grown in terms of the innovation centers, the programs, the boots on the ground, the mentoring, more corporations getting involved,” Gonzalez said of the city’s startup and tech ecosystem growth. He pointed to Apple helping launch the Propel Center, a tech hub for historically black colleges and universities, and the Russell Center for Innovation and Entrepreneurship. Both centers aim to support Black entrepreneurs and tech talent.

Atlanta’s long been something of a business capital for the southeast. Plenty of large companies, including Delta, Coca-Cola, Cox Enterprises, and the IntercontinentalExchange, all have their headquarters in the city, with others setting up regional offices there. And Atlanta is home to around 40 corporate innovation centers. That’s particularly helpful both for startups to sell into companies—especially business-to-business companies—and in terms of the number of sales professionals already in the city, according to Cummings. There’s been a lot of success getting salespeople from other industries to come into tech, he said.

“We’re a huge hub for a lot of these Fortune 500 companies, so what I found really interesting is a lot of the time during the pitch competitions or meetings with founders, I meet people who were former executives at Coca Cola, or a former executive at Home Depot,” Kylan Kester, a community coordinator at the nonprofit Startup Atlanta, said in an interview with Crunchbase News.

One challenge, though, of doing business in Georgia is sometimes having to navigate the political landscape, according to Kester. For example, when Georgia Gov. Brian Kemp signed a controversial anti-abortion bill. That action caused some companies to pull out of contracts in the state, impacting businesses, Kester said. Some film and television production companies, however, including Disney and Netflix, said they would reconsider doing business in the state if the law was implemented.

That’s changing though, because of the outcome of recent elections in Georgia, which flipped to blue in the presidential election and elected Democratic senators Jon Ossoff and Raphael Warnock.

“I think in this last year we saw a lot of what’s been happening in Georgia and the change that’s happening in Georgia, and that gave some light and hope for some startups who are concerned about the political landscape,” Kester said.

The city’s established business community combined with its proximity to large universities like Emory and Georgia Tech provides a robust talent pipeline, particularly for engineering. Georgia Tech graduated 4,039 engineering students across all of its engineering undergraduate and graduate programs in fiscal year 2020. According to the university, it awards more engineering degrees to underrepresented minorities and women than any other school in the country.

Atlanta is also home to a number of historically black colleges and universities, including Morehouse College, Spelman College and Clark Atlanta University. Those schools will be key for the city’s tech ecosystem growth as well, Gonzalez said, as will Atlanta’s diverse talent pool and industry base.

“It’s just a beautiful playground for entrepreneurs to be part of,” he said.

Illustration: Dom Guzman

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