Some predictions are merely predictions. Others are dead on.
And American Underground gets credit for the latter. Today, the operator of startup campuses (and owner of ExitEvent) reveals a plan to double the size of its space on Main Street in downtown Durham by January, making room for 50 additional companies and meeting a 2012 goal of housing 200 companies by 2015.
The expansion will happen on the third and fourth floors of the building owned by Self Help Credit Union and its rooftop, and will include 46 private offices for teams of 8-20, 12 new co-working desks, an Entrepreneurs Living Room with couches, TVs and a private bar, and a rooftop patio for outdoor seating and events. It will look out on the new 21c Museum Hotel, planned to open in spring 2015, and eventually, the 26-story residential, office and retail tower planned kitty-corner to the building.
The announcement comes four years after American Underground was founded in the basement of the American Tobacco complex, a year after its Main Street campus (known as [email protected]) opened and six months since the Raleigh space was unveiled.
It’s evidence that – despite some damning reports about our region’s venture capital climate – companies are still growing and forming.
Chief Strategist Adam Klein says Underground companies created 122 jobs in the first half of 2014. They raised north of $2 million collectively. And just this month, 15 new companies signed on as tenants. Several have moved from larger tech hubs to the Triangle.
HQ Raleigh has witnessed a similar phenomenon. It outgrew its Raleigh location in a year’s time, quadrupling in size in March 2014 to a 15,000-square-foot location in the heart of the city’s warehouse district.
“I think the trend we’re seeing in the Triangle is the core strength of our entrepreneurial community is business-to-business software companies,” Klein says. “It’s in some ways less sexy than a slick new mobile app or a company like Uber but these kinds of companies can weather the fluctuations in venture capital better because they’re forced to build a company with customers at the outset.”
Startup campuses continue to form in cities around the world and American Underground is nearly a year into its partnership with nine of them through the Google Tech Hub Network. In May, it announced that AU tenants may freely use desks at those centers when traveling in Denver, Chicago, Waterloo, London, Austin, Milwaukee, Nashville, Tel Aviv and Detroit. And vice versa.
The true power of that network is still being realized, Klein says. Though AOL co-founder Steve Case’s $100K investments in 10 Google Demo Day companies (including [email protected] tenant Windsor Circle and American Tobacco campus tenant Automated Insights) and Google funding for the American Underground-sponsored SOAR women’s network are early testaments.
Klein expects Google hub announcements over the next year to further connect capital sources and talent in each tech hub.
“There’s more momentum for understanding how to create a bigger story out of those metros and a real sentiment that Silicon Valley and other tech hot spots are losing their momentum as the only place you can build a company,” Klein says. “Google is really committed to see what Case calls ‘The rise of the rest’ happen.”
Construction on the Main Street building begins in September, but space reservations are available now. Klein says rents for reserved co-working desks will range from $250-300 per month, office rents begin at $329 and large offices at $799. There’s already a waiting list of 25 companies for offices. And @Main opened a year ago with its 45 offices 90 percent committed.
Klein also expects more demand for co-working (There are 70 coworkers today) once 1,500 residential units under construction in downtown Durham come on line over the next year.
So what’s the bottom line? Act fast. Bad funding news or not, startup space is filling up in the Triangle.