Austin’s Hottest Startups on Why the Texas Capital Is America’s Most Exciting Tech Hub

| © Doris Liou / Culture Trip

Tech & Entrepreneurship Editor

America’s most innovative entrepreneurs and investors are choosing Austin to make their start-up dreams a reality. With a low cost of living, favorable business environment, diverse talent pool and cultural charm, it’s not hard to see why the city has captured the tech industry’s attention.

At Stubb’s Bar-B-Q, a restaurant and live music joint in downtown Austin, paper plates bend under the weight of brisket and neon-yellow potato salad. On stage, singer-songwriters croon about leaving small towns for big cities.

For decades, Austin has been defined by scenes like this – urban cowboy-college student clientele and rock’n’roll-meets-Willie Nelson performers.

Today though, start-ups are transforming the city, shifting everything from its politics to its place in the cultural zeitgeist. According to the New York Times, there were some 138,000 tech jobs in the Austin metropolitan region in 2018 – about 14 percent of the total jobs in the area.

Venture capital firms (VCs) – business groups that invest in promising tech startups – from both coasts have put money into Austin businesses, and in recent years the city has gone from having one dominant local VC firm to six or seven substantial Austin-based investors. In September 2018, billionaire tech tycoon Peter Thiel’s VC Mithril Capital Management announced plans to relocate to Austin from San Francisco, while overall VC investment in the city has grown from less than $300m in 2002, to more than $1,300m in 2018.

Apple has also announced plans to build a giant new $1bn campus in the city. Promising to bring up to 15,000 new jobs with it, the expansion, on top of the existing 6,000 Austin-based Apple employees, would make the tech giant the single biggest private employer in the region.

Venture capital investment in Austin, $m

For locals, the sudden tech surge has raised questions about the city’s future. With rents, gentrification and noise complaints on the rise, how will the music city keep its soul?

There are practical concerns, too. Austin already suffers from some of the worst traffic in the nation, while the sudden glut of high-paying tech jobs has strained the city’s historically affordable housing market.

For others, however, the tech industry is a natural and welcome addition to the city’s rich cultural mix.

Eugene Sepulveda, a director and partner at Austin-based Capital Factory, a co-working space, startup accelerator and tech hub that has been the state’s most active investor since 2013, sees the city’s varied industries as a long-standing part of the city’s history.

“Austin is a town of cowboys and hippies and yuppies and artists and entrepreneurs. It’s where people want to live, work, play and raise families,” says Sepulveda. “Consequently, it’s easy to attract the right talent needed to build companies. Investors follow opportunities for investment. And increasingly, they too are moving to Austin for our quality of life – plus the favorable business and tax environment.”

For Annie Klomhaus, VP of Operations at New Knowledge, an Austin-based information integrity start-up that protects brands and industries from manipulative online campaigns, the city’s culture is also influencing the types of start-ups growing there.

“The cultural energy here is in sync with our business ideals. To be onboard with us in this effort of course requires each of our employees to have a strong tech background – but it also requires people to think as independently as they do creatively and intellectually. Embracing an avant-garde atmosphere like Austin’s helps foster that ideology,” says Klomhaus.

The city appeals on a personal level, too. “We love it here. Living and working in a tech hub that is also the Live Music Capital of the World with a rich creative sector is an ideal way to work and live,” adds Klomhaus. “No other city can boast proximity to this level of intense artistic creativity and technological achievement.”

New businesses are also able to stand out in Austin. Boston, New York and Silicon Valley are extremely competitive markets – it’s hard to break out as a new company when you are up against the Googles and Apples of the world.

For its part, Austin’s city government has been active in courting the industry’s attention.

Mayor Steve Adler is an active tech investor, and his daughter Sarah Adler founded and successfully sold Spoon University, a food resource start-up based in New York. The state of Texas and the University of Texas at Austin (UT) are also players in investing in Austin’s entrepreneurial ecosystem, fostering public-private partnerships and joint business-academic research hubs like the Herb Kelleher Center for Entrepreneurship, Growth, and Renewal, at UT’s McCombs School of Business.

“Austin’s explosive population growth combined with the existing cluster of intensely curious nerds makes me think anything is possible here,” says Klomhaus. “The amount of change and growth in this city even in just the last few years has been astounding. And since the city leadership actively supports development, I only see bright things on the horizon for the Austin start-up scene.”

landscape with balloons floating in the air


Connect with like-minded people on our premium trips curated by local insiders and with care for the world

Since you are here, we would like to share our vision for the future of travel - and the direction Culture Trip is moving in.

Culture Trip launched in 2011 with a simple yet passionate mission: to inspire people to go beyond their boundaries and experience what makes a place, its people and its culture special and meaningful — and this is still in our DNA today. We are proud that, for more than a decade, millions like you have trusted our award-winning recommendations by people who deeply understand what makes certain places and communities so special.

Increasingly we believe the world needs more meaningful, real-life connections between curious travellers keen to explore the world in a more responsible way. That is why we have intensively curated a collection of premium small-group trips as an invitation to meet and connect with new, like-minded people for once-in-a-lifetime experiences in three categories: Culture Trips, Rail Trips and Private Trips. Our Trips are suitable for both solo travelers, couples and friends who want to explore the world together.

Culture Trips are deeply immersive 5 to 16 days itineraries, that combine authentic local experiences, exciting activities and 4-5* accommodation to look forward to at the end of each day. Our Rail Trips are our most planet-friendly itineraries that invite you to take the scenic route, relax whilst getting under the skin of a destination. Our Private Trips are fully tailored itineraries, curated by our Travel Experts specifically for you, your friends or your family.

We know that many of you worry about the environmental impact of travel and are looking for ways of expanding horizons in ways that do minimal harm - and may even bring benefits. We are committed to go as far as possible in curating our trips with care for the planet. That is why all of our trips are flightless in destination, fully carbon offset - and we have ambitious plans to be net zero in the very near future.

Winter Sale Offers on Our Trips

Incredible Savings

Edit article