Why startups are betting big on Texas
Everything is bigger in Texas, they say—including an economic boom there in recent years.
Austin, in particular, consistently ranks among the fastest-growing metro areas in the country, and is vying to become one of the top startup hubs. Meanwhile, the state has successfully lured hundreds of companies to relocate to Texas in recent years.
In 2024, Texas surpassed New York as the top employer of workers in the financial services industry, and it will up the ante with the opening of the Texas Stock Exchange later this year. This is the latest sign that the state, the eighth-largest economy in the world, is becoming a global financial and business powerhouse.
“Especially in the last decade, we’ve really seen a maturity of the many ecosystems that we have in Texas,” Michael Sury, an associate professor of finance and director of the Center for Analytics at the University of Texas at Austin, said at the Fast Company Grill at SXSW.
A wave of transplants, initially drawn to Texas for various reasons, including its business-friendly environment, have helped build a “very vibrant mix of industries” in the state, he added.
With a thriving startup culture, Austin has diversified in the past decade from a once “tech-heavy scene” to an economy that initially attracts talent, then gives people plenty of reasons to plant roots, said Mike Marcantonio, a partner at LiveOak Ventures, an Austin-based venture capital firm.
“It’s been exciting to see that maturation, and now we’ve got the sort-of entire food chain if people want to stick around and as they start having kids,” Marcantonio added.
What’s next
Texas has successfully courted businesses that are escaping higher taxes, more regulations, and a higher cost of living in states like California and New York. That’s created a sense of momentum, with the state investing in infrastructure and services that support further growth, Marcantonio said, noting that he believes there’s an opportunity for Texas to become one of the top-three innovation hubs in the U.S. over the next decade.
Additionally, Sury pointed out, the Texas Stock Exchange presents a new opportunity for the state to put its mark on financial markets.
Marcantonio added: “The biggest effect it could have, or hopefully will have, is allowing more companies to access the public markets.”