Rochester accelerates its pace to become top tech hub in America
Monday, April 11, 2022
Source: Rochester Business Journal
Rochester is on its way to becoming a national hub for technology innovation. Experts predict that it has the highest potential of any city in America for developing high-tech, high-income jobs.
It’s incredible news for the region’s economic development. Area startups have seen an uptick in investment from around the world as investors take note of Rochester’s robust startup ecosystem, including its large, highly educated workforce and university system. The support they receive is encouraging other entrepreneurs to consider building their businesses in the region.
Once unheard of in Upstate New York, area startups are now regularly seeing double-digit million-dollar funding. Aerosafe Global, a provider to the pharmaceutical and medical device industries, raised $47.5M and is now ranked among the fastest growing companies in America. Other examples include $30M invested in Casana, which has developed a novel at-home health monitoring device; $15M invested in SunDensity, a climate tech company that makes smart coatings to increase the power output on solar panels; and $15M invested in OWL Autonomous Imaging, a photonics startup that has created a camera for safer autonomous vehicle operation. That’s just a few of the many Rochester innovators securing recent support.
Capital is being raised from investors both inside and outside the region. Several new venture funds have opened in Rochester in the past few years. The Rochester Angel Network has raised two funds and invested in 35 companies across Upstate, NY. Excell Partners, now on its fifth venture fund, is not only investing in home grown deals, but has also been successful in attracting foreign-based companies to launch and grow their high-tech startups in Rochester. Last year, Excell led a $10M investment round that helped recruit Neurogenesis, an Israeli-based biotech company that has a promising cure for Multiple Sclerosis. Neurogenesis is a story of community collaboration. In addition to the investment they received, the company has partnered with the University of Rochester to conduct Phase II clinical trials and is receiving assistance from GRE and ESDC to identify facilities and grant opportunities.
“The venture landscape in the Rochester region has transformed over the past five years,” said Theresa Mazzullo, CEO of Excell Partners. “We are now attracting and co-investing with major investors such as GNC, JPMorgan Chase, State Farm Insurance Ventures and others. All told, Excell has attracted more than $430 million in private capital that has come in after Excell’s investment. This investment goes back into the region to support the local economy.”
It takes a robust startup ecosystem of entrepreneurs, services providers, investors, mentors, and corporate partners to produce a pipeline of companies that can successfully raise capital and grow revenues. It’s that sort of ecosystem that is present in places like San Francisco, Austin, and New York. And it’s that type of ecosystem that is emerging right here in the Greater Rochester region.
NextCorps Drives Growth, Committed to Transforming the Region
NextCorps, Rochester’s largest resource for startup programming, is leading the charge through its development of internationally recognized programs and services aimed at meeting the distinct needs of startups. It’s joined by many partners who provide training and support to local entrepreneurs, including RIT Venture Creations, the Center for Urban Entrepreneurship, Venture Jobs Foundation, the Tech Farm, UR Ventures, the Commissary, Endeavor WNY, Pathstone, and many others.
In 2018, NextCorps opened a state-of-the-art business incubator facility in Rochester’s iconic Sibley building, rallying the community around the importance of supporting entrepreneurship and innovation. This sparked the creation of the Downtown Innovation Zone, which today is home to more than 190 innovative and creative class companies.
Over the past four years, NextCorps has provided incubator services to 139 startups and 23 University of Rochester student-led companies. It also created three unique accelerator programs—Luminate, Venture for ClimateTech, and Scale for ClimateTech— aimed at bringing emerging tech startups from around the world to Rochester, as well as the Embark accelerator that helps people in the Finger Lakes region start a software business using no-code tools.
An additional 129 startups have participated in these accelerators to grow their businesses and gain access to the rich resources and talent that exists in optics, photonics and imaging; climate technology; and scalable web and mobile applications. NextCorps is also helping them raise additional capital. To date, the companies have secured $252M, collectively.
NextCorps also offers one of the top-performing Manufacturing Extension Partnership (MEP) programs in the U.S. to help local manufacturers find the funding and project resources needed for growth. In 2021 alone, manufacturers completed 195 projects, helping to create or retain nearly 1,100 jobs, resulting in an economic impact of $201.6M.
Building on Momentum
As innovation becomes a national priority, community leaders recognize the huge potential it has to create jobs, hold onto regional talent, and strengthen communities by providing rewarding, lucrative opportunities.
The recent growth of the region’s startup and innovation ecosystem demonstrates what can be achieved when communities invest in creating robust environments where new ideas and businesses can grow and thrive. And the demand for these entrepreneurial resources is strong. Last year alone, 9,400 people attended events, workshops, or webinars hosted by NextCorps.
Through continued community involvement, Rochester can further its momentum towards becoming a top tech hub in America, but it requires community-wide participation.
If you are starting a new business, apply to an accelerator program or become a member of an incubator like NextCorps to tap into the services and resources that can help you move forward faster. Those interested in investing can join an angel group to explore investment opportunities. Those in the business community can help by being a customer for a local startup, signing up to be a mentor, or by joining NextCorps’ Catalyst Club to help expand startup education and support.
With everyone’s involvement, Rochester will be able to take the incredible growth it’s seen over the past five years and springboard to another level, joining the ranks as one of the top tech and innovation places in America.
James Senall is president of NextCorps.