Business is booming in Utah's tech industry. On a percent change basis, Utah was the top state nationally for tech job growth in 2017 at 3.6 percent.
But growth in the tech industry isn't limited to new jobs. Utah's tech companies are also finding it easier than ever before to secure funding in a highly competitive industry. Local venture capital firms are stepping up their investments to help create a more vibrant ecosystem in the Beehive State.
"Capital is like water," says John Knotwell, CEO for the Utah Technology Council. "It flows in the place of least resistance. The highlight here is capital is flowing in Utah."
Utah companies looking to secure financing for early-stage growth are generating more support than ever before. Local venture capital firms aren't just dipping their toes into the water to check the temperature. They are jumping into the pool and taking laps with enthusiasm.
MountainWest Capital Network reported steady growth for the technology/software sector in its 2017 Deal Flow Report. From 2013 to 2016, Utah tech companies raised $6.1 billion from a cumulative total of 1,006 private placement funding deals through venture capital, private equity and angel investments over that four-year period.
The peak of the four-year period came in 2015. That year, private placement deals hit $1.9 billion in value for 263 reported deals.
"For the size of Utah, we have some really good venture capital firms," says Katie Chandler, the Deal Flow chair for MountainWest Capital Network. "I don't know that there's many other markets in the country that are the size of Utah that have that many venture capital firms that are investing in the state. It definitely helps grow that a lot faster than I think a lot of other states have experienced."
Early-stage funding is seeing the biggest boost from this uptick in investment in Utah tech companies.
Kickstart Seed Fund launched the state's richest investment fund to date in January at $74 million. This new round of funding almost doubled Kickstart's previous fund of $39 million announced in 2015. Since it launched in 2008, Kickstart has invested in more than 100 startups in Utah and the Mountain West region and committed approximately $148 million in capital.
Peak Ventures, another Utah venture capital firm, raised $23 million in its first round of funding when it launched in 2014. For the firm's second round in 2017, it boosted funding to $50 million.
Growth in these funds...