Austin Was Destined to Replace Silicon Valley. Then the Pandemic Hit
What the hottest boomtown off the coasts will look like on the other side
Last summer, RigUp moved into a 24,000-foot, magazine-spread worthy office in the kind of location you’d expect for one of Austin’s most buzzed about venture-backed startups. The company — a hiring platform for energy-sector contract workers — had recently raised a $60 million Series C round. It wasted no time spending it, leasing a full floor of a 30-story story highrise on Congress Avenue, overlooking Lady Bird Lake, where hordes of youthful Austinites come to run, walk dogs, and do paddleboard yoga. The airy space, with its ample natural wood, LED boards, and chill-out corners stuffed with natural vegetation, was an ideal backdrop for the company’s co-founders, Xuan Yong and Mike Witte, to lure talent. Over the next nine months, they would hire over a hundred new employees, with no idea just how dramatically their business and the city of Austin would soon change.
Yong and Witte first met at Texas A&M, where Yong studied finance and economics and Witte studied engineering, before starting the company in 2014. The ascent of RigUp was, in many ways, emblematic of Austin’s rise in recent years as the next Silicon Valley — or at least, its closest approximation outside of the coasts. According to Crunchbase, in 2019 Austin ranked number 10 among all U.S. cities for VC funding — the only city in the top 10 outside the San Francisco Bay Area, Seattle, or the Northeast. Last year, Austin-based companies raised $1.73 billion in venture funding, the biggest haul since the height of the dot-com boom in 2000, according to PricewaterhouseCoopers/CB Insights.
Money from Houston, the corporate epicenter of the U.S. oil industry and just a two and a half hour drive, has also been instrumental in greasing Austin’s tech economy.
The year also capped nearly a decade of gravity-defying growth. Austin’s rare combination of cool affordability, youthful irreverence, year-long summer weather, low taxes, and tons of well-paying jobs helped make it America’s fastest-growing big city last year. Among the flood of recent new…