Here’s a short list of superstar tech companies that have come out of Birmingham in the last few years, either being acquired or recapitalized at significant valuations: Therapy Brands, Shipt, Daxko, Landing, DirectorPoint, Help Lightning, NXT Soft, Hospicelink, TriNovus, Deposit Accounts, StrategyWise, Atlis RFID, HighFive Health Care, TicketBiscuit, Command Alkon, ProctorU, CTS, Fleetio, Lake Homes Realty, Vincari, Pack Health and Prepaid Technologies.
These innovative companies have raised and generated many hundreds of millions of dollars, created thousands of jobs and have done much to build Birmingham’s reputation as a place that grows strong technology companies.
Successfully starting and growing a technology company requires more than tech talent, a good idea and lots of energy. It also requires the support of an entire ecosystem of investors, advisors, mentors, higher education, support organizations and big companies.
The fact that so many strong tech firms have come out of Birmingham is evidence that we are developing a strong tech ecosystem – though, unlike many other cities, our tech ecosystem operates under the radar. This is fine, as far as getting the job done, but if we hope to take Birmingham to the next level as a tech center, it needs to be more overt. We are making strides to make this happen.
Our current tech ecosystem is largely based on individuals who are quietly making themselves and their money available to tech startups. In Birmingham, there is often a values based motivation to this involvement.
Now, not all startup funding has a “double bottom line” component in Birmingham, but most early capital investments here entail some kind of personal relationship. That is, an investor takes a meeting with a startup founder because the investor believes in the founder as a person as much as he is intrigued by the new company’s concept and business plan. That is changing, in part due to efforts of the Alabama Futures Fund, Alabama Capital Network, and Birmingham Venture Club, but the opportunity remains to continue to institutionalize investment locally.
One of the most encouraging recent developments within the ecosystem is that much of the money made in tech companies here is reinvested in other local tech companies.
Birmingham’s tech ecosystem also includes people who invest their time in the founders of startups. Another key part is large companies based here that buy the products and services created by our local tech companies
We still have work to do on two fronts: 1) bringing in outside capital and 2) overcoming negative stereotypes of being a somewhat rural, backward market, along with the unattractive racial stereotyping that comes from Birmingham’s high-profile role in the civil rights movement many years ago.
The key to solving these problems is simply to get people – especially people in the tech industry – to experience Birmingham, because they are blown away when they get here. They discover a friendly, welcoming, very livable place with all the support you need to start a successful tech venture.
In fact, getting technology experts and funders to experience Birmingham is one of the main reasons that Founders Advisors started the technology conference Silicon Y’all. Every year, we bring together in Birmingham a select group of tech founders and investors from throughout the country to share ideas and inspiration. Not only do new ideas and investments spring from this gathering, but we introduce tech opinion leaders to the real Birmingham, and they go back and spread the word in their networks, and our reputation as a solid tech center moves up one more notch. Through efforts like Silicon Y’all, Innovation Depot and the Techstars Alabama EnergyTech Accelerator, among others, Birmingham is well on the way to solidifying its reputation as a center of tech innovation.
Zane Tarence is a partner at Founders Advisors. He has led and completed more than 87 technology deals, including facilitating the sale of some of the fastest growing Vertical SaaS businesses in the United States.
