Despite an Economic Downturn, Tech is only at "...the end of the beginning"

Austin Business Journal June 20th-24th 2022 pp8 “After record growth, are the boom years over for startups?’ by Brent Wistrom


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image from crunchbase.com



According to a report by Startup Genome, Austin is the 25th “best startup ecosystem” worldwide, 10th in the USA and first in “CompTIA’s Tech Town USA”


But is the bubble about to burst after a long run that recorded an “astounding growth in the number of startups in the area…and the largest influx of venture capital dollars the area has ever seen?”


Early stage deals in America jumped from about 7,000 in 2020 to nearly 10,000 in 2021 and Late stage deals from about 2,000 to 3,000.


But now reportedly, with signs of an economic downturn it is “harder for Austin startups to raise funding.” Too, now some of the valuations are inflated which “often spells lower returns for investors” and may mean lower valuations before the next funding round.


Having noted a downturn this report by ABJ suggests “the trend is that more cities are attracting and retaining large shares of tech talent.”


Startup Genome’s CEO, JF Gauthier, notes that inflation and other factors will have an impact but yet he says “I think this is a very long-term trend, and we’re not in the middle of it, I think maybe the end of the beginning, with tech becoming one of the main economic drivers all over the world.”