Just west of the Research Triangle in North Carolina, Charlotte's technology industry has been slowly growing over the past few years.
As we reported about three weeks ago, Bank of America has announced its plans to invest $1.5 million over the course of the next three years to build up a FinTech hub in Charlotte. With this news, we decided to focus our Tech Center on the up-and-coming North Carolina city. In this week's Tech Center tracker, Michael Praeger, CEO of AvidXchange, spoke with PYMNTS about how Charlotte is the next big tech arena on the East Coast.
Before we jump into the post, here are a few quick facts about Charlotte and its tech scene:
- The city had a population of 827,097 in 2015, making it the seventeenth largest city in the United States.
- Median household income (2015): $53,637
- Per-capita income in the past 12 months: $32,254
- There are more than 175 startups and tech companies.
- Total funding in the last 12 months: $172,375,000
With the North Carolina Technology Association regularly holding its annual tech expo in Charlotte this year, the city is continuing its upward trajectory. Honorees at this event included AvidXchange, Atom Power, Red Venture, Peak 10, Jackrabbit Technologies, ScentAir Technologies, RadixBay, SignUp Genius and Commscope, all from the Charlotte area.
The North Carolina Technology Association's 2017 State of Technology Industry Report found that Charlotte and the Research Triangle area account for 60 percent of the state's tech sector. Michael Praeger, CEO of AvidXchange, an accounts payable and payment automation solutions company, shared his thoughts on how the Charlotte technology sector is expanding.
Here is an except of the conversation:
PYMNTS: Can you describe your personal and/or professional experience with the tech community in Charlotte?
MP: I've been heavily invested in the tech community since I moved here in the late '90s, because I've always believed in the power of connecting with other professionals and sharing best practices. I helped to start the Charlotte Entrepreneurs Organization's (EO) chapter in 1998 to help foster dialogue in the Queen City around innovation and opportunities. That group has continued to flourish and connect leaders across our city to have the conversations that need to take place in order to put Charlotte on the map.
It's funny, because AvidXchange is often still referred to as a startup, and we've been at this for over 17 years. I think that it's partly for a couple of reasons. The first reason is that the tech community here has just really started to establish itself over the past few years, and we've become a name that has become associated with the growth. The second reason is that we continue to stay very plugged into the technology community here with great initiatives in Charlotte, the Packard Place, which is an incubator for local entrepreneurs, along with PayCLT, which is Charlotte's initiative to support new innovation related to payments and entrepreneurism in the Charlotte community. We are also heavily involved with groups like Next Money CLT, because it's continuing the conversation around innovation and getting people to think of Charlotte as a banking hub and beyond.
PYMNTS: What do you think makes Charlotte (or North Carolina as a whole) an attractive location for both entrepreneurs and investors? Is there anything people may find surprising about operating a business there?
MP: Charlotte offers a quality-of-life benefit that's unmatched. While it may seem rudimentary, the reasons why Charlotte was a great choice for me and others I know is that the weather here is amazing and the cost of living is reasonable. We get all four seasons here, and that's a real commodity for people who have lived in the north and braved a lot of brutal winters. In addition to that, there is a wealth of talent here from the great school systems in North Carolina. We've formed great relationships with CPCC and UNCC and have a thriving internship program in place with them today. We see a lot of graduates from throughout the state who want to stay in North Carolina, and we're happy to give them a home.
There's just so much opportunity here. We're thankful for the great headway that the banks have made here, because it's created a great talent pool here that we can all benefit from. I would say that the thing that people would be most surprised about if they haven't visited Charlotte recently, or ever been, is just how much growth the city has experienced over the last few years and its developing skyline. It's a running joke here that the Charlotte bird is "the crane," because there is so much construction constantly in place. The construction is a sign of the great economy that we're cultivating here. Charlotte has all of the amenities of any larger city, but with slightly less traffic and a little more southern charm.
PYMNTS: How does the startup and tech scene in Charlotte differ from other cities in the United States?
MP: We started referring to being part of the "Silicon of the South," but we know that this is still an aspirational statement as we compare to Silicon Valley in California. However, while we may not be there yet, what is unique about Charlotte is that there is so much opportunity here, and we're really just getting started. Anyone who moves here or starts a business here is part of the foundation that all of our future growth will be built upon. Another trademark characteristic of Charlotte is that it is a major banking hub. The infrastructure that the banks have built and the financial talent in the area has created a conducive atmosphere for FinTech companies like AvidXchange. I feel really fortunate that AvidXchange has been an integral part of putting Charlotte on the map as a tech hub and helping to pave the way for other companies.
PYMNTS: What are some of the challenges facing startups in Charlotte? Are there any initiatives to help address those barriers?
MP: I would say that the biggest challenge facing startups in Charlotte is access to early-stage capital. I believe this is a challenge for Charlotte because we haven't had a lot of private companies that have gone public. Since there haven't been many liquidity events, there hasn't been the opportunity to make capital available for others. I don't think that this is so much about initiatives as it is about companies helping to pave the way and gain the attention of investors. I think that companies like Lending Tree, Red Ventures and AvidXchange are helping to send out to positive signals and with the evolution of these types of innovative growth companies in Charlotte, they will spawn other future entrepreneurial ventures as well as provide seed capital for new ventures.
PYMNTS: How has Charlotte's startup ecosystem changed in recent years? What do you think has sparked this transformation?
MP: Success stories from companies like AvidXchange and others have helped create an assurance that companies can thrive here. Also, the strong banking community here has also helped to recruit and bring talent to Charlotte from all over the world. Once people are here, they are staying here and starting their own businesses. As I mentioned previously, places like Packard Place are helping to make startups a reality. Charlotte is fortunate to also have a significant cost-of-living advantage over other regions such as Silicon Valley and Boston. This structure cost advantage will be a key differentiator over time as we continue to make ground in competing with these other markets for technology talent.
PYMNTS: What is Charlotte's FinTech sector like? How has it changed or grown in recent years?
MP: It's definitely taking hold, and we think that the next few years will be really exciting for the Queen City. One shift that we're seeing right now in the marketplace is that banks are starting to look to technology companies for complementary solutions for their customers. It's a win/win, because the banks don't have to invest in the resources to bring new offerings to market and they can maintain focus on their core banking competencies and tech companies can stay focused on innovation. We've had success with some major banking partners, such as KeyBank, and we expect for these successful partnerships to continue.
PYMNTS: Is there anything else you think people should know about Charlotte's role as a global tech center?
MP: We're making history every day. We have all the right attributes to become a boom, and we think that it's only a matter of time.