DURHAM – With e-commerce booming in the wake of the pandemic, Spoonflower is scaling quickly.
In just the last 10 months, the Durham on-demand, digital printing company has tripled the size of its workforce – and is expecting to hire an additional 100 employees the coming year.
Its CEO Michael Jones, however, isn’t too worried about a talent crunch.
“The number of people moving to our area has increased dramatically,” he told WRAL TechWire. “We’re seeing a strong influx from across the United States. That’s made [hiring] even easier.”
The pandemic has triggered a tech migration. As remote working becomes the norm and people become disgruntled with the cost of living and high taxes in places like California and New York, local VCs and execs say the Triangle is among the top beneficiaries.
A mid-size metro, with lots of job opportunities, high quality of life, low cost of living, and a bustling startup scene, is a big draw for transplants, says Michael Haley, Wake County Economic Development’s executive director.
“Many are moving from New York, New Jersey, Pennsylvania, and California,” he says.
At present, Wake County continues to grow by 64 people every day – with 43 moving here, and 21 born here.
North Carolina ranked No. 9 among on the top growth states in 2020, according to a recent U-Haul report tracking migration trends. California, meanwhile, ranked last “by a large margin.”
“We expect this trend to continue,” Haley says. “However, it’s too early to know the full impact the pandemic could have on overall migration.”
The Triangle’s time
For years now, downtown Raleigh, and the Triangle at-large, has been steadily building its own bustling tech ecosystem.
Cisco, IBM, GlaxoSmithKline, Red Hat, Lenovo, Cree, Iqiva and SAS all call Raleigh home with headquarters or large campuses and operations. The Research Triangle Park, home to 200 companies and counting, is only a 20-minute drive to the west, cementing the region’s status as a “newer tech hub.”
Then there’s Durham with its own buzzing startup scene; and Holly Springs, home to international pharmaceutical company Seqirus; and smaller towns like Garner and Chapel Hill, with plenty of entrepreneurs.
While the region hasn’t made headlines for attracting big-name firms in recent months, it’s quietly notching up its own wins.
The same week Oracle relocated its HQ to Austin in early December, the publicly traded New York technology firm Phreesia quietly shifted its headquarters to Raleigh in a securities filing.
A few months earlier, Avaya Holdings Corp., a multinational information and technology company, also relocated its headquarters to the Triangle from Silicon Valley.
Others on the list: Envestnet, a financial technology company headquartered in Chicago, expanded their Raleigh presence by adding 148 new jobs; and Microsoft created 500 new jobs, expanding the company’s growing presence in Morrisville.
Mark Easley, a local angel investor, believes it’s a harbinger of what’s to come.
“The Triangle is on the verge of being a better and friendlier version of Silicon Valley,” says the retired exec who now serves as editor of CrowdfundNC.com.
Back in the 1980s and 90s, he worked in executive management in the semiconductor industry in Silicon Valley.
“The big difference between now and then is that the engineers and other tech employees out in California now want to get away from there. The glamour and draw of Silicon Valley and LA has faded as the social situation has deteriorated and the taxes and costs of living have skyrocketed.
“Twenty years ago, if the CEO and management of a California company wanted to relocate somewhere, none of the employees wanted to go.’
Easley himself relocated to the Triangle in 2000.
“We can take advantage of the mass exodus from California,” he says. “North Carolina is a great place to do business, and to live. We just need to keep getting the word out in California, keep building for the future, and keep doing what we are doing.
A long time coming
David Gardner, founder of Cofounders Capital in Cary, says this mass migration out of California has been in the works for some time.
“Before COVID, I was meeting with a California executive or entrepreneur, almost every week, [who wanted] to move here and get out of the Valley.”
Part of the pull, he adds, is the realization that there’s growing venture capital on the ground here in the Triangle.
“The Valley is crazy expensive. Yes, valuations are higher — but if you have to raise twice as much to get your venture going and hire staff, then that higher valuation is not really a better deal. People went to the Valley because that was where all the startup investment money was. That is not as true as it used to be.”
Jason Caplain, partner of Bull City Venture Partners, agrees.
He says new funds are popping up around the Triangle all the time.
Among them is the husband-and-wife team — Ryan Bethencourt and Mariliis Holm —- behind Sustainable Food Ventures. The couple recently relocated from the Bay Area to the Triangle because of the Triangle’s growing agtech scene.
The micro-VC fund wants to invest in the “future of food.”
“We’re seeing lots of green shoots with more capital to be available to founders,” says Caplain.
He calls it a “huge win.”
“That’s only going to help prop up the area.”