One of the region’s most promising homegrown tech companies will receive $10.7 million in incentives from state and local governments to stay in Raleigh.
Pendo, which employs 171 people in its downtown Raleigh office, in turn must create 590 jobs over the next five years and invest $34.6 million in its facilities. The company, which has offices from San Francisco to Israel, must also designate Raleigh as its world headquarters.
CEO Todd Olson said in an interview that Pendo has outgrown its offices in the Wells Fargo tower on Fayetteville Street and is in talks with developers about building a tower in downtown Raleigh. The company has already looked at a few sites around downtown, he said.
“We think that we are going to have ‘Pendo pink’ somewhere on the skyline,” Olson told a crowd gathered at the offices Monday, referring to the company’s signature color.
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Olson said the company should have a location nailed down by next spring.
The average annual wage for the new jobs will be $86,824. That’s above the the Wake County average annual wage of $56,245.
The N.C. Economic Investment Committee voted Monday to provide the incentives. Gov. Roy Cooper followed with the formal announcement at Pendo’s offices.
Pendo’s cloud-based technology helps business customers improve their software by providing behavioral analytics on what features customers are using and which ones they’re ignoring. It also sends pop-up messages to software users notifying them of features they may not know about.
The company’s ascent has been swift. Five years ago, Pendo was just a tiny software startup based in Raleigh’s Warehouse District that was founded by an experienced group of former Red Hat, Cisco, Google and Rally employees. Now, on the back of incentives and more than $100 million in venture capital money, it is committed to employing nearly 1,000 people globally.
The state was competing with Nashville, Tenn., for the expansion. Olson — who has worked in Raleigh since 2001 — said the company is always considering its best options.
“You know, we were looking at the entire Southeast, the larger cities (in the region) so to speak,” Olson said. “We actively looked, and we talked about putting offices in different locations, but when we did the cost-benefit analysis we decided that this has been our home and it feels like the right place to continue to invest.”
He added that when Pendo was a much smaller company, it wasn’t uncommon for investors to offer the company money in return for relocating to a different city. But in the end, Pendo has always decided to stay.
In an interview with reporters, Cooper said keeping Pendo in Raleigh was another sign that the city is becoming a hub for technology and software companies.
“We have concentrated on trying to grow the entrepreneur and innovation economy,” Cooper said, noting innovation hubs in the Triangle like Raleigh HQ and the American Underground in Durham. “This company came from Raleigh HQ, just starting with people coming together with an idea. We are working to foster that type of ingenuity, that type of innovation and entrepreneurship.
“(Pendo has) gotten to the point where they could go anywhere in the world and they were being courted by a lot of other states and they knew what they had in North Carolina and decided to stay here.”
The total incentive package is worth more than $13.5 million. Here’s how the incentives break down: Wake County is awarding $395,781, the City of Raleigh is providing $590,000, the community college system will provide $885,000 worth of training, and the state is providing $8.8 million. Because Wake County is considered to be thriving economically, the Department of Commerce also will pay up to $2.9 million into the state’s Utility Account, which helps rural counties fund infrastructure projects.
Pendo will need to meet its hiring and investment goals to receive the funds.
This is the state’s third economic development announcement in less than a week.
On Wednesday, the state awarded $12 million in state and local incentives to Advance Auto Parts to move its headquarters to Raleigh from Roanoke, Virginia. The company will create 435 jobs here over five years.
On Friday, Honeywell, a Fortune 100 company whose products range from airplane cockpit systems to oil refineries, announced it would relocate its headquarters to Charlotte from New Jersey. Charlotte and Mecklenburg County offered Honeywell a combined incentives package worth about $46 million. The state’s incentive package for Honeywell won’t be known until later Monday after the governor signs legislation approved last week that includes tax breaks designed for companies bringing corporate positions to the state.