There’s much potential for Orlando to be what Austin is to Texas, what Atlanta is to Georgia — a booming hub where startups flock from around the world to dream, innovate and grow.
The numbers are already showing potential: New PitchBook data found that in the first half of this year, a little more than $360 million was invested in the Orlando-Kissimmee metro area, way more than the $144 million invested in H1 last year. Q2 2022 saw $320 million invested, tracking higher than the $90 million and $30 million allocated in Q2 2021 and 2020, respectively.
Not totally surprisingly, Q3 saw a dip from the $160 million invested last year to just near $23 million this year. But compare that to the numbers PitchBook has for Gainesville: Gator City has received just $9.57 million in capital investment this year. Or even Port Saint Lucie, where around $12 million in capital was allocated this year.
“We have tremendous amounts of velocity happening and we’ve been quiet in how we’ve told the story, but there is a huge underswell of stealth technology being built here.” David Adelson of the Orlando Economic Partnership
“When people hear Orlando, they don’t think tech,” Jordan Walker, the Orlando-based co-founder of the messaging platform Yac, told TechCrunch. “People automatically think Disney World theme parks, but there is a lot of innovation out here.”
“The Orlando tech community is a very inclusive and very collaborative community,” David Adelson, the chief innovation officer at the Orlando Economic Partnership, added. “We have tremendous amounts of velocity happening and we’ve been quiet in how we’ve told the story, but there is a huge underswell of stealth technology being built here.”
TechCrunch conducted a vibe check to see what’s happening right now in Orlando’s burgeoning venture scene, as well as what needs to occur for it to continue thriving. Founders and investors mentioned efforts tapping into the entrepreneurial community, while Adelson highlighted the city’s plans to become the center of the metaverse. All of this could lead to the one thing Orlando really needs in order to make a bigger splash: a beacon.
“Every major city has a beacon,” Walker’s co-founder, Hunter McKinley, told TechCrunch. He pointed out that Miami Mayor Francis Suarez and Austin’s Capital Factory have been leaders in driving innovation to their cities.
“Look at niches that seem to stand out in the city and find the most influential people to incentivize them to become a beacon,” he continued. “Orlando needs a Suarez or Capital Factory to take ownership.”
Orlando: The Silicon Swamp?
Orlando would do well as a venture hub. It has an emerging art scene, an incubator of talent from the University of Central Florida, which is one of the largest schools in the United States, and good weather with a low cost of living compared to Los Angeles, San Francisco and even Miami.
There are already a few well-regarded VC firms in the area, such as DeepWork Capital and Florida Funders. The city also has a rising entrepreneurial scene and is home to events like Orlando Innovation Week, put on by the nonprofit Synapse Florida.
Christine Caven, director of communications at PS27 Ventures and the vice president of statGNV, said it’s only a matter of time before more investors start paying attention to Orlando, especially as the venture community continues to migrate to the Sunshine State. This, paired with the continued support of companies already in the area, could prove to have a big payoff, she said.
“Companies like Yac are bringing in investors from outside of Florida,” Caven told TechCrunch, noting that Yac’s popularity piqued the interest of VCs, encouraging them to see what else is being built in the area. “Orlando still has some areas to improve and grow, but I think it’s just getting started.”
A boost is also set to be provided by the Orlando Economic Partnership’s efforts to market the city as the new center of the metaverse, or, as it will simply be known, the MetaCenter. Adelson said the city’s dip into web3 makes perfect sense because it wraps all of the city’s most prominent industries into one idea: There’s gaming (EA Sports is building a headquarters in Orlando), education (UCF and Full Sail University), entertainment (Disney and Universal), and even augmented reality (from the city’s previous work with aerospace company Lockheed Martin).
“I look at Miami and I think about blockchain. I think about crypto, but that’s a little volatile for us,” Adelson said. “As everyone is looking at this gold rush right now, we’re more about providing the shovels and giving people the tools to create for this next generation.”
However, there are a few hurdles for the city to overcome. Ken Hall, the vice president of DeepWork Capital, noted the brain drain that often occurs after students graduate from the university system. He said people feel they must leave the area to build a great company or join a good startup, a trend he hopes is reversed by the recent successes in the city.
Kirubha Perumalsamy, a founder from the area, agreed with that sentiment, saying that more talent staying in the area provides opportunities for aspiring founders to learn, network and connect. Another issue is that companies in the city need to find more and bigger exits, he said. There have been two exits this year in the Orlando-Kissimmee area, down from six last year, according to PitchBook data.
“As more and more people successfully exit their company or make a few investments that worked out, they can share their learnings with people,” Perumalsamy said. “There isn’t a lack of ambition, just a lack of guidance.”
Walker hopes that the new focus on underserved markets proves fruitful for Orlando and his company. PitchBook found that the entire Southeast region saw $1.27 billion invested this year, which is already more than the $1 billion invested by this time last year. This gives Walker hope, as his company just released a new feature, and he’s hoping to market it as a “shining” product to emerge from a tertiary tech city.
“The infrastructure is there,” Walker said. “The city just needs to attract talent, work with people already here, put them in front of the right resources, partnerships, customers, VCs. It’s really just exposing what’s happening in Orlando aside from Disney World.”
Or, as Hall puts it, the world of venture is a long game. “And Silicon Valley wasn’t built overnight.”