Austin has been surging as one of the most popular tech hubs in the country for several years, and some experts already compare the city to Silicon Valley for its tech prowess.
According to Axios, the average tech salary in Austin stands at $157,612 and is growing at a faster rate than tech salaries in San Francisco, Los Angeles, Seattle and Chicago. Pairing this growth with a lower cost of living compared to other tech cities, Austin is sure to keep reeling in tech talent.
Employers are also reaping the benefits the city and state have to offer. Texas has no state income tax, which has resulted in many tech companies opening offices and even moving their entire operations to the state. The most notable example of this was in 2021 when Tesla relocated its headquarters from California to Texas. Since then, companies from across the country have relocated as well and hired local talent.
In 2022, local tech companies across several industries raised capital but the trend was especially strong in the aerospace, fintech and artificial intelligence sectors. As we head into the new year, the Austin tech scene is expected to keep growing in these three key sectors. Read on to learn about the tech sectors that saw significant growth this past year and are poised to continue their upward trajectory in 2023.
Aerospace
There is renewed interest in space from the U.S. government as it anticipates its next lunar mission to take place in 2024. The government is also making strides for larger missions in which people would live and work on the moon rather than just visiting for a short amount of time and coming back to Earth.
To achieve this goal, the development of new tech is needed, and NASA has already awarded contracts and funding to an Austin-based tech company. This past year, ICON secured funding from NASA to develop 3D printing techniques to build homes and structures on the moon. The company’s current technology is being tested in lunar gravity that will replicate the gravity on the moon.
Shortly after ICON inked a deal with NASA, another local company, Slingshot Aerospace, raised $40.85 million in capital to further develop its satellite tracking platform.
In addition to these two companies, Elon Musk’s SpaceX started construction on a 521,000-square-foot facility in the greater Austin area. Rumors of the facility began circulating in March 2021, and now the facility may play a part in the manufacturing of its orbital rockets used by NASA.
Going into 2023, venture capital firms, the U.S. government and other entities will likely continue investing in aerospace companies. There will also be increased interest in the industry as the launch date for a 2024 space mission looms closer.
Artificial Intelligence
Artificial intelligence is in the midst of a golden age with great interest from both consumers and investors. Specifically, generative AI has been creating a lot of buzz with the likes of Lensa, which uses AI to create artistic versions of users’ photos, and OpenAI’s ChatGPT, which uses AI to generate text responses to users’ questions. These AI-backed products and others have blown up in recent months and caused a reckoning among people and businesses regarding what they can do with AI technology.
While Austin is not yet home to commonly known AI companies, it is home to a bevy of businesses pushing the uses of artificial intelligence beyond image generation and virtual assistants.
For example, Jasper helps users find the right words or tone to express themselves by generating text from prompts imputed by the user. The company has experienced huge demand from creatives and businesses and has over 70,000 paying subscribers. It is also one of the most promising AI startups in the area, as it hit unicorn status with a valuation of $1.5 billion less than a year after it launched.
StoryFit is another local startup developing new uses for AI. It uses AI to help screenwriters and TV producers determine if their content will attract viewers. The company also had a successful year and raised $5.5 million in funding. To continue this momentum, StoryFit plans to implement an “aggressive hiring strategy.”
As artificial intelligence continues to shine in the limelight, the industry will continue to evolve and many companies — both new and established — will develop new platforms with unique uses for the technology.
Fintech
Fintech was one of the most funded sectors in tech in 2021 with investors pumping over $131 billion into the sector. Although funding has fallen in 2022, investments are still coming in and backing everything from buy-now-pay-later companies to startups offering alternative banking solutions using cryptocurrencies.
Austin is home to many big and small fintech companies. According to data from Built In, there are some 250 tech companies in Austin and the surrounding area that offer financial services of some kind. This past year, several local fintech startups with unique products aimed at helping people improve their credit scores, pay off debt or get better access to credit saw significant growth and are expected to see huge success in 2023.
Onuu is one local company looking to help those “underserved and overlooked” by the American financial system, according to its co-founder Felix Oritz III. Oritz and Ryan Wuerch co-launched Onuu to offer financial literacy advice, credit lines with low-interest rates and life insurance to underserved communities. Onuu also uses machine learning to personalize its offerings to users.
Austin-based StellarFi also helps underserved communities, including LGBTQ and BIPOC individuals, people with disabilities and low-income households. The company helps them improve their credit score by reporting repeat monthly payments to credit bureaus.
Another company in the fintech sector helping underserved communities is Chipper, an Austin-based student loan repayment platform.
Many of these companies are still in the early stages but have raised money and are poised to grow in the new year.
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