The past year was a banner year for the companies headquartered at the Durham co-working community American Underground.
The 269 startups and smaller companies based there raised $39.4 million in 2017, a record for the startup community. It was also a 47.6 percent increase from the $26.7 million raised in 2016.
Doug Speight – who leads the Capitol Broadcasting-owned co-working space AU after Adam Klein moved into a new role last month – chalked the growth up to Durham becoming more of a destination for national investors.
“Our companies are obtaining a lot more visibility with investors around the country, and we are seeing a lot more (fund)raises from larger markets,” he said. “It’s a great sign for the region in terms of capital availability.”
That visibility, Speight said, has been aided by American Underground’s efforts to increase diversity at the tech hub.
American Underground has gained national recognition for increasing the number of minority- and women-led companies using its facilities – 48 percent of the companies are now led by women or people of color.
Most notably it partners with Google to host a summit for black-led companies that focuses on shrinking the funding gap between white and minority-led businesses. The event brings black-led startups and large venture capital firms from across the country to Durham for a week every year.
“I think the partnership with Google has been one of the most impactful things that has happened in the past five years,” Klein said. “It has led to so many ancillary things. Google’s brand has given validity to the startup community here ... creating a platform to show the country, and hopefully the world, what Durham can do.”
American Underground also said that 30 percent of the companies based there are now led by a woman. Nationally, only 5 percent of tech startups are owned by women, according to advocacy group Women Who Tech.
One of the companies that saw the most growth at American Underground this year was Mati Energy, a health-focused energy drink startup that is led by Tatiana Birgisson.
Birgisson, who started the company while at Duke University, is one of the most recognizable startup leaders at American Underground, having won Google Demo Day in 2015. The company also received $100,000 in funding from noted investor Steve Case, the co-founder of AOL.
Mati raised more than $5 million in the past year, a sum that is helping it expand its drinks to stores across the Southeast. In total, the company, which makes all-natural energy drinks, has raised roughly $8 million since 2012.
Speight said the number of women- and minority-led companies at American Underground receiving funding shows its programs – such as Soar Triangle, an organization that promotes women entrepreneurs, the Google partnership and its entrepreneur-in-residence program – are successful.
“There is an appetite for investing in women and people of color (right now), and there is an eye toward diverse investment,” he said.
American Underground by the numbers:
▪ 269 total companies
▪ $39.4 million raised in funding
▪ 82 percent of companies have earned revenue
▪ $1.9 million spent at local businesses within two miles
▪ 608 new jobs created
▪ 966 people use AU-owned spaces every day
▪ American Underground companies support more than 1,500 jobs, as of last year, according to data compiled by Thriving Cities
Data collected in part with The Kenan Institute