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Austin emerges as a city of tech giants; startups raise billions in funding

In 2022, the tech sector was hit especially hard by layoffs. Despite that, Austin-based startups raised about $5 billion in funding.

AUSTIN, Texas — As Austin's skyline continues to change, the city is solidifying its tech hub standing. And startup companies are a part of that success.

In 2022, the tech sector was hit especially hard by layoffs. Despite that, Austin-based startups raised about $5 billion in funding. This is slightly down from a 2021 high of $5.4 billion. 

"What I have seen in Austin in the last few years is an unearthing," said Roland Peña, vice president of global tech and innovation for the Greater Austin Chamber of Commerce. "I think we are ... globally viewed now. And so, we have the eyes of the world. We have determined that we have the right ingredients, the intellectual capital, the capital markets, the lifecycles, the right infrastructure."

The Greater Austin Chamber and Opportunity Austin, in partnership with Dealroom.co, have released a report on this data. The report also digs into the sectors and businesses attracting the most funding and attention.

Credit: KVUE

"It just goes to show that our startup ecosystem, our innovation ecosystem is mimicking what we have in the mature stages and the corporate side of the ecosystem as well," Peña said.

Experts say Austin is becoming a hotspot, attracting talent and entrepreneurs. This puts Austin at No. 25 worldwide when it comes to the creation of successful startups and scaleups. 

"People who were frustrated with the cost of living or the taxes or other political stuff or just wanted new opportunity found that leaving San Francisco or New York and coming to Austin was not only better for their business, but it was better for their lifestyle, better for their employees," said Ben Rubenstein, co-founder and president of Setpoint, a platform that describes itself as the "foundation for real estate innovation."

The new report indicates Austin startups are valued at a combined $128 billion, an all-time high for the city. There were also several companies surpassing a $1 billion valuation in 2022, achieving what researchers call "unicorn status."

Peña said Austin also holds a No. 11 ranking in the U.S. for the successful creation of startups.

"There are things that are happening, dynamic things that are happening in Austin," he said. "Creativity and innovation. It's a great place ... I think people are curious."

Boomtown is KVUE's series covering the explosive growth in Central Texas. For more Boomtown stories, head to KVUE.com/Boomtown.

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