American Underground-based firms raise $97.4M, create 402 jobs in one year

American Underground - Google HubThe 189 member companies of the American Underground have raised more than $97 million and created 402 new jobs between Oct. 2020 and Sept. 2021, according to a report the organization shared with WRAL TechWire, prior to making it publicly accessible.

Further, demand for startup coworking facilities is high, said Tim Scales, the director of growth for American Underground, in a statement sent to WRAL TechWire with the repot.  Demand is high enough that occupancy has reached 100% of capacity for private offices at American Underground’s three facilities, said Scales.

Scales told WRAL TechWire in an interview that the nature of startup coworking is likely to result in some availability each month as companies grow or graduate, despite being currently occupied in full.

“We’re not anticipating an expansion—our objective is to go deep versus wide, so our focus is to invest in our current spaces and community through programs and events,” said Scales.

Nearly half of member companies, 49%, are considered to be at the “scale” stage, according to the report, while 11% are in the “ideation” stage and 11% are in the “validation” stage.  But those startups in the ideation phase increased dramatically in the prior year.

“Our 2021 annual report revealed that the proportion of “ideation-stage” startups at the AU tripled over the past year, and is at its highest point since we started measuring,” said Scales.  “We’re seeing a spike in new startups in Durham, including many first-time entrepreneurs but also serial founders spinning up their second or third venture.”

Scales highlighted Tiny Earth Toys, founded by Rachael Classi, which during the report’s time frame, grew from an ideation stage company to attract a $1.5 million capital investment, led by Bull City Venture Partners.

“While the 2020 report showed us that the Durham startup community was weathering the pandemic, the 2021 report paints an even more optimistic picture of growth,” said Scales.  “Not only in the number of startups and dollars raised, but importantly in founder diversity and who’s receiving that capital.”

Of the 189 member companies based at one of the three facilities, 52% are led by a woman and/or a person of color, the highest such percentage since the organization began to track this metric, said Scales.  Further, half of the companies that raised money are led by a woman and/or a person of color, the report states, with 78% of member respondents reporting that they’d identified at least one customer, employee, or investor through the network.

The region is also attracting entrepreneurs from other areas, as 14% of the member companies had founders who chose to relocate to the Triangle from other states, including California, New York, and Texas.

“We’ve seen founders relocate to Durham to scale up their startup, including Ryan Bethencourt with Wild Earth and Melvin Hines with Upswing,” said Scales.

In total, 845 employees work for member companies, including the 402 newly created jobs, the report states.

“I expect to see continued growth in the number of AU members and companies in 2022, especially new coworkers and early stage startups,” said Scales.  “We’re planning improvements to our coworking areas and new founder-focused programs to support those folks and help them scale up.”

American Underground is owned by Capitol Broadcasting Company, as is WRAL TechWire.

Thanks to WRAL TechWire for this Capcom story & graphic.

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