One of the fastest-growing regions in the U.S., Charleston, South Carolina is now the No. 1 mid-sized metro for millennials, according to the US Bureau of Labor Statistics. As of 2016, the metro area was growing at three times the rate of the U.S. population.
Often among the 34 new residents Charleston welcomes each day are venture capitalists and real estate developers, who are drawn to Charleston for a chance to participate in a fast-growing economy, while living in a more affordable coastal hub. These change agents have helped shaped Charleston into an emerging location for startup activity, and its tech community offers lessons for other cities on how to capitalize on an influx of new residents.
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The seeds for Charleston’s startup community were sown 26 years ago, when nonprofit software company Blackbaud made the move from New York to Charleston. Since Blackbaud planted itself in Charleston, the region has welcomed more than 250 additional tech companies and 11,000 tech workers. (Disclosure: Blackbaud is an investor in Charleston Open Source.)
The game-changing moment for Charleston’s tech community was the 2001 launch of the Charleston Digital Corridor, a city-backed initiative to attract and grow technology startups. To date, the Corridor has launched more than 80 startups, including Blue Acorn, GoodDoneGreat (acquired by corporate social responsibility platform YourCause), and PeopleMatter (acquired by hiring platform Snagajob). Soon, the Corridor’s resources were attracting startups from outside the region, like Echovate, a “people analytics” software firm that chose Charleston over cities like Raleigh, Austin, and Boston.
Since then, the Charleston tech community has continued to invest in accelerator programs and pitch competitions to help take startups to the next level. Starting in 2014 with just 20 members, Charleston Women in Tech now has a membership of 1,500 members and was one of only four all-women’s groups to receive an invitation to the first-ever White House Tech Meetup in 2015.
There’s also the nonprofit Harbor Entrepreneur Center, which, four years after its 2014 launch, has graduated more than 30 groups of aspiring entrepreneurs. Last year, Charleston also welcomed a new pitch competition from local startup Launchpeer, which grants winners a $50,000 investment and free access to Launchpeer’s developers, designers, and VC connections once the company relocates to Charleston.
These days, Charleston companies are attracting more sizable investments than in years past — like machinery software company Atlatl, which raised $10 million in 2015. In the past five years, there have been more than five major exits by Charleston companies.
In 2017, Charleston’s venture capital ecosystem reached a new milestone with the establishment of Good Growth Capital, a $20 million venture capital fund dedicated to startups from Charleston and the Southeast. The fund was started by Amy Salzhauer and David Mendez, both seasoned investors who, like so many others, moved to Charleston from New York and Boston, respectively, to raise their families. The firm has invested in several Charleston companies since its inception, including Questis, an enterprise-level financial platform and PT On Demand, a private pay platform for physical therapists.
The rise of tech in Charleston has also reshaped the community as a whole and inspired substantial real estate growth. This trend was spearheaded by Steve Zoukis, who moved to Charleston to retire after a successful career in New York real estate. Noticing that Charleston’s startups were starting to outgrow the confines of Charleston’s historic downtown, Zoukis and his business partner, S.C. native Michael Wooddy, invested $65 million into an eight-acre tech and creative district with two developments: Half Mile North and Pacific Box & Crate.
Modeled after the amenity-laden campuses of Silicon Valley, these developments are transforming the city’s Upper Peninsula, an area once home to warehouses and mechanic garages. Automated bookkeeping company Ceterus is one of dozens of companies that have migrated to the Upper Peninsula. After moving to Charleston from Michigan three years ago, Ceterus has attracted $10.2 million in funding.
As tech in Charleston evolves, the region faces new hurdles. Charleston’s next big challenge is attracting the volume of talent necessary to sustain its growth, an issue familiar to many growing tech communities. Our organization, Charleston Open Source, is a collaborative effort by Charleston tech firms, working to address this problem. The Charleston Regional Development Alliance also recently launched the Charleston Community Guide to help businesses and talent find their place.
Today, Charleston is home to scores of innovative tech companies in industries like real estate, HR, cybersecurity, health care and ecommerce. The growth of Charleston’s tech community illustrates the importance that today’s entrepreneurs place on an affordable, vibrant lifestyle that is often not found in places like Silicon Valley and New York.
David Ginn is the president and CEO of the Charleston Regional Development Alliance (CRDA). He has been with the CRDA since its inception, serving as the organization’s executive vice president and project director before being named president and CEO in 2000. In 2016, CRDA launched Charleston Open Source, a partnership with local tech companies that is designed to attract and retain tech talent in Charleston.