Arizona rising: Startups add to state’s impressive growth

From Taipei to Tucson, Arizona’s historic industry wins drew international attention last month.

In just one day in December, global semiconductor leader TSMC heralded a $40 billion investment north of Phoenix, an event that attracted President Joe Biden to the state, while 130 miles to the south, lithium ion battery maker American Battery Factory announced a $1.2 billion factory and headquarters in Tucson.

The twin announcements represent the culmination of a historic year for advanced manufacturing in the Copper State, which claimed the fastest year-over-year manufacturing job growth in October.

Not to be outdone, Arizona’s startup entrepreneurs made big waves of their own last month.

In December, the Arizona Commerce Authority (ACA) announced the 10 awardees of the 2022 Arizona Innovation Challenge (AIC), one of the country’s largest pitch competitions designed to advance technology commercialization.

The awardees were selected from a pool of more than 100 applicants, capping a process that began five months earlier. The 2022 AIC awardees and their sectors include:

“The 2022 AIC awardees represent some of the most promising startups anywhere in the country,” said Sandra Watson, president and CEO of the Arizona Commerce Authority.

Since 2011, 120 startups have been selected as AIC awardees from more than 2,500 applicants, representing a combined portfolio value of more than $2.5 billion.

Many of these awardees have grown into national and global leaders. For example, 2017 AIC awardee Paradox and its AI-driven job-recruiting platform has reached unicorn status, with a valuation of at least $1.5 billion. Qwick, a 2018 AIC awardee that developed an on-demand staffing-as-a-service platform, has landed in the top 1% of the Inc. 5000 list, and to date has raised nearly $70 million in capital. Likewise, pioneering EdTech startup CampusLogic, a 2015 AIC awardee, raised $200 million before being acquired by global education solutions company Ellucian.

It’s easier to attract the nation’s most innovative thinkers when they’re given the tools and support needed to succeed.

Arizona has empowered entrepreneurs with bold ideas by streamlining burdensome regulations and cutting taxes. And startups across Arizona have leveraged the state’s highly skilled and growing workforce.

The ACA supports startups at all stages through a comprehensive suite of programs. In addition to the AIC, programs for small business and entrepreneurs include Venture Ready, the ACA’s premier business mentorship program; the Virtual Accelerator, a program designed for startups to increase their investor readiness; Venture Madness, a head-to-head startup pitch competition that connects entrepreneurs with investors; and the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, which are aimed at helping startups and small businesses stimulate technological innovation.

“The Arizona Innovation Challenge has been really helpful and instrumental in that early stage (of a company’s growth),” said Curtis Gunn, a longtime Arizona angel investor and former judge for the AIC. “We are now seeing the effects of a flywheel in which successful companies either exit or have grown to the point where executives are going out and starting their own companies. And those are the next generation of companies that are getting financed.”

Each 2022 Arizona Innovation Challenge awardee moves through three rounds of competition, which includes pitching their startups before a panel of investors. As part of their award, startups meet with mentors and industry experts for one-on-one coaching via Venture Ready.

“We’re incredibly grateful for the support of the Arizona Commerce Authority,” said Brett Farmiloe, founder of Terkel, a 2022 AIC awardee. “From ACA’s Virtual Accelerator program to the AIC, 2022 has been a year full of learning and growth for us. We’re honored to be recognized as one of Arizona’s innovative startups.”

All this startup momentum contributes to Arizona’s dynamic economy. The 2022 Dice Tech Job Report ranks Phoenix in the top six among cities nationwide for growth in tech job postings year over year, outpacing hubs such as Boston, Dallas, Seattle and Chicago.

A study from Career Cloud ranks Arizona as the fifth best state to hire workers, recognizing the state’s “large, well-educated workforce and pro-business regulatory environment.”

And, for the fifth time in the last six years, Maricopa County claimed the No. 1 spot in the Talent Attraction Scorecard released by Lightcast, a global leader in labor market analytics.

From global manufacturers to cutting edge technology startups, Arizona’s innovation ecosystem is generating a lot of excitement. As professionals and businesses increasingly flock to the state, 2023 promises to be another year full of opportunities.

Read more about how Arizona empowers innovation at azcommerce.com.