Technology incubator launched for city

Ga. Tech, companies want to lure startups to area.

The next Facebook, Amazon or hit mobile device like the iPhone could start in Atlanta thanks to a new venture capital collaboration launched by the city, Georgia Tech and 10 of the metro area’s largest corporations.

To get more tech investment in Atlanta and to continue the city’s recent rise as a technology leader, the group started a venture fund Thursday dubbed Engage. Its purpose is to lure technology startups looking for a place to incubate the Twitter or Instagram of tomorrow.

“This is one more arrow in the quiver of opportunities for Atlanta and Georgia to expand what we’re doing in innovation, entrepreneurship and economic development, particularly in the area of small business startups,” said Georgia Tech President G. P. “Bud” Peterson.

Thursday’s announcement is a jewel in Georgia Tech’s crown and also bolsters the city’s and state’s positions in the national tech landscape.

In the past year, Anthem, Honeywell, NCR Corp. and GE Digital have announced major tech hubs in the city of Atlanta, promising thousands of high-paying jobs in the coming years.

In particular, Midtown has emerged since the Great Recession as the Atlanta region’s technology boomtown. Two years ago NCR announced it was relocating its headquarters from Gwinnett County to Technology Square.

The company later doubled down on its commitment by announcing a second phase of development. NCR will ultimately have more than 5,000 workers in Midtown.

Other prominent companies that have built new innovation labs or expanded near Georgia Tech include Equifax, Southern Company, Panasonic, Sage Software and AT&T. Coca-Cola and Turner Broadcasting teamed up in late 2015 to back startups that could bring potential innovations to both companies.

Atlanta faces stiff competition in attracting talent. Silicon Valley, which has claimed the mantle of technology king for decades, is still the center of gravity in the tech world, while North Carolina’s Research Triangle and Austin have carved out solid reputations of their own.

Upstarts such as Atlanta and Boston are pushing hard to join the exclusive club.

“Atlanta doesn’t have the name recognition that Silicon Valley or Austin has, though the talent is here,” said Jeff Kagan, a wireless analyst. “The big question is which cities are going to benefit from the momentum. We have the moving parts, but can we turn it into a race car and win.”

Access to Fortune 500 firms

For startups, Engage gets them in front of top leaders at Fortune 500 companies such as Home Depot and Delta Air Lines that they wouldn’t ordinarily have access to, Peterson said. That gives them a shot at pitching ideas to folks who have the resources and connections to turn an idea into the Microsoft for the next generation.

The other Engage members are AT&T, Chick-fil-A, Georgia-Pacific, Georgia Power Foundation, Intercontinental Exchange, Invesco, UPS, and Cox Enterprises, owner of The Atlanta Journal-Constitution. The 10 companies have committed $15 million to the venture fund and will actively support the accelerator through mentoring, education and collaboration.

“I’m excited about Engage because it’s a great example of how Atlanta works together for the greater good,” said John Dyer, chair of the ACP and president and CEO of Cox Enterprises. “Through Engage, we’re all coming together to bring high-tech startups to our region and show why Atlanta is a great place for innovation.”

Engage is also a big deal because while metro Atlanta has no shortage of tech ideas, the area has struggled to attract the high-stakes venture capitalists or angel investors that throw millions of dollars at the next big thing, boosters have said. Cultivating that seed capital has become a priority for research universities and state and local leaders.

A state venture capital fund called Invest Georgia is now operational, though it has not ramped up to its full potential.

“Venture capital is a challenge that we have,” Peterson said. “But we have 10 companies that are very interested in the opportunities and innovations that can be incorporated into their businesses or that they can help grow. Showing that kind of engagement from the Fortune 500 will attract the venture capital community.”

Clark Dean, senior managing director in Atlanta for real estate giant Transwestern, said Atlanta’s reputation as a technology and entrepreneurial hub has grown, thanks in part to its deep “knowledge pools” and diversity of industry. The city is a hub for health care information technology, cybersecurity, mobility, and financial technology.

Dean, who focuses on serving tech companies at Transwestern, said in a recent interview that the region also is leveraging its strength in higher education, including Emory, Georgia Tech, Georgia State, Morehouse and Spelman College.

“Research universities generate innovation and great ideas,” he said.

Calling Atlanta the “southeast’s technology, innovation and entrepreneurship capital,” Atlanta Mayor Kasim Reed said in a statement, “We must take advantage of these unique assets to further stimulate our growing ecosystem of startups and growth-stage companies, connecting them to capital, talent and mentorship.”