It's an obvious and yet quiet truth: the D.C.-area offers an attractive market and city for out-of-town tech companies to expand into. This continues to happen for any number of reasons, including recruiting purposes, the vibrant consumer market and a proximity to lawmakers, among other things. But the underlying theme is that this activity is no longer an occasional decision, rather it has become a trend.
Whether it's Uber, GetAround, Shift Technologies or some other quickly growing tech brand, the D.C.-area has been repeatedly prioritized by numerous high profile companies in their expansion efforts. And as such, the real question has become why this is happening.
Well, that's the very question we put to five companies who chose D.C.
In each case, the organizations picked the D.C.-area either for their first overall launch city and/or first East Coast market.
Some of the possible reasons you're probably already thinking about may be: the stable economy supported by federal employment opportunities, the young and yet well paid demographic it boasts or even, for a growing list of companies, Governor Terry McAuliffe's friendly handshake paired with some tax incentives in Virginia. But whatever the case, it's easy to see that the DMV is longer being ignored by national tech brands.
The Question
Uber
In an interview with DC Inno, Uber D.C. General Manager Zuhairah Washington said that the ride hailing giant primarily decided to pick D.C. as the location for its East Coast headquarters because: "D.C. has great talent and is a place where innovation and collaboration thrives."
Washington added, "I think people [in the District] were really looking for an efficient and reliable way to get from point A to point B, as getting a ride in all corners of the city wasn't always possible. Beyond the variety of people who live and work in the city, there's also an emerging tech scene in D.C."
For Uber's more than 200-person East Coast HQ—which houses a variety of Uber employees from engineering to sales staff—local recruiting was a key factor in choosing the District. Of note: personnel in the D.C. office oversee operations in more than half of Uber's East Coast markets—from Baltimore to Raleigh to Tampa.
Interestingly, a number of Uber's pilot product programs were also first tested in D.C., including a corner store delivery service.
D.C. was among the first cities to test UberEats, the company's now-popular food delivery service which has since scaled nationally. And D.C. was also an early recipient of the UberPool service, a ride hailing service that pairs riders together in one car towards a similar destination to save money.
GetAround
San Francisco, Calif.-based Getaround, the developers of an app that facilitates peer-to-peer car sharing services, originally launched in D.C. in May.
Founded in 2011, Getaround’s platform functions like a cross between Uber, Airbnb and ZipCar. Once logged into the mobile application, users are able to view a proximity-based list of available vehicles. These vehicles, ranging in hourly rent rates and model, are listed by car owners. The owner, renter and automobile, itself, are judged by a user generated rating system similar to Uber.
Importantly, the District represented the company’s first East Coast market launch and the decision came during a time when Getaround needed to scale quickly. Six months prior, Getaround had raised a venture capital round totaling $24 million led by Cox Enterprises.
"For Getaround, D.C. was was a no brainer. Washington is an innovative city with high urban density, a young, innovative population and excellent public transportation infrastructure," said Jessica Scorpio, founder of Getaround. "As we’ve seen in San Francisco, this is a great recipe for Getaround’s success."
In a previous interview with DC Inno, Scorpio explained "we received thousands of pre-launch sign ups in the D.C. area - this community told us they were ready for a new way to get around and we listened."
The idea that a company's East Coast hub would be similar in nature to a previously launched and successful regional endeavor is a common theme we saw during our interviews. And it flat out makes sense.
If, as a business, you can find the same ingredients that made you successful in the past then, to some degree, the risk is lessened in a new city. This comes down to, at least for GetAround, customer demographics and similar public infrastructure.
Breather
Quebec, Canada-based Breather, the provider of unique, on-demand, individual commercial office space rentals, offers an alternative working space to customers for about $30 per hour. The Canadian startup is part of what has become a trendy, co-working rental industry—underlined by other rivaling companies like WeWork and Cove.
Breather leverages a software platform to connect people with available local listings. According to Inc. magazine, the company's clients include BuzzFeed, Etsy and Facebook. Founded in 2012, Breather has raised more than $27 million from private investors to date, according to CrunchBase.
In early February, Breather announced it would expand into five key markets over the next two months, including London, Los Angeles, D.C., Chicago and Toronto. And though the company already operates in Boston, D.C. represented an important expansion city already recognized by rival WeWork (D.C. was one of WeWork's first hubs outside of its founding city of NYC).
Dave Haber, Breather vice president of growth & marketing, told DC Inno: "D.C. is a quickly growing metropolis with a thriving startup and tech community and a workforce that is increasingly embracing remote work and on-demand services. We've received an impressive amount of requests to come to D.C. from our fans and current customers, so as we focus on expanding our existing network in the eastern U.S. and across the country, it makes a lot of sense to bring beautiful, professional on-demand workspace to the nation's capital."
For Breather, the combination of perceived early adopters and apparent customer demand made the D.C. expansion decision an easy one.
This early stage home concierge platform, aimed at home and apartment owners, is based in San Francisco but it chose to first launch in D.C. to build its business.
The small West Coast startup offers a subscription program for home owners so that they can access basic on-demand repair, cleaning and maintenance services via a monthly membership model. Clients include not just home owners but also landlords and real estate management firms.
CEO/founder Jorey Ramer said that he chose the D.C. real estate market for his company because it mirrored many of the market qualities found in his hometown of San Francisco. Because the company covers maintenance for cooling and heating systems, they also found D.C. advantageous because of its similar climate.
Other factors present in the larger D.C.-area like a young demographic of first time home owners who may be more inclined to employ their services, high population density and a diverse audience, all helped in making the decision, said Ramer.
Ramer also said that he spent months reviewing volumes of comprehensive residential real estate data before making the choice.
"We wanted to choose a place that if we succeeded in our first market we could succeed anywhere," Ramer described.
Super offers three tiers of its products, each covering different types of home services, for $25 to $75 per month. A small co-pay is required when a customer relies on the service to fulfill, for example, a repair order on their broken sink and/or washing machine.
Given the growing value of local residential real estate in and around D.C., Ramer believes that his company can offer a helpful reoccurring service for numerous customers who are first time home owners—many of whom may have rented in the past and are accustom to a landlord taking care of home maintenance issues.
Shift Technologies
In late January, San Francisco-based Shift Technologies (known as Shift) announced it would be expanding to Northern Virginia by joining tech incubator 1776 in Crystal City.
Shift has developed a popular online, peer-to-peer marketplace that streamlines the sale and purchase of used automobiles between its users. Cars sold through Shift pass a 150-point inspection and come with a seven day money-back guarantee. For the seller, the company handles everything from buyer inquiries and test drives to listing the vehicle on multiple websites.
Upon the announcement, Shift said it would invest $20 million into the local office plan, primarily via an aggressive hiring strategy, according to the Arlington Economic Development (AED) group. Governor McAuliffe was also on hand to welcome the company, saying in a statement: "the recruitment of companies like Shift to Virginia is at the very heart of our work to diversify and build a new Virginia economy."
McAuliffe, according to Shift CEO/founder George Arison, played a decisive role in recruiting the company to Virginia. Arison explained that McAuliffe went so far as to give the company his personal phone number in case they experienced any challenges or had any pertinent questions during the move.
Also of note: Jamie Radice, Shift's new head of communications and public policy, previously worked as McAuliffe's communications director. She was the one who made the intro between Arison and the governor's office.
During the planning stages, Arison told DC Inno that he was searching for a city on the East Coast to expand into that boasted a certain repertoire, including an increasingly strong talent pool of software engineers; a significant customer base of 25 to 45-year-olds capable of purchasing used luxury automobiles; a business-friendly environment with less stringent labor laws and an avenue to acquire a lending license; and high population density that can cater to multiple cities (Baltimore, D.C. and Annapolis).
