Four Ways the San Antonio Startup Ecosystem Changed in 2019 + What to Watch For in 2020

By Iris Gonzalez
San Antonio Startup Ecosystem Map as of December 30, 2019. Credit: Startups San Antonio.

There’s no doubt San Antonio’s entrepreneurial ecosystem has grown in 2019.

The San Antonio Startup Ecosystem Map represents a somewhat sequential startup life cycle. A macro-level view, the graphic lists local resources available throughout an entrepreneur’s journey from student to CEO to the need to scale for global growth.

Compared with the first map version, which showed the startup resources in San Antonio from February to November 2018, San Antonio has since added programs, organizations, and stakeholders interested in supporting local startup activity.

What changed in San Antonio’s startup ecosystem in 2019? We noted four significant trends to emerge over this past year.

1. More students eager to learn about startup life

Comparing the ecosystem maps for San Antonio’s startup community from early to late 2019 reveals a spike in the number of student startup-focused programs.

Applications to Trinity University’s Students + Startups undergraduate internship program shot up since opening the program in July 2018 to college students across the U.S. By November 2019, Trinity had announced the program moved to the San Antonio Area Foundation which has the resources to manage the national student startup internship program.

Read: Trinity University Students+Startups Internship Program Moves to San Antonio Area Foundation

Read: Trinity University’s Students+Startups to Expand Nationwide in 2019

UTSA also launched an internship program in June designed to match graduate students in data science, computing, and artificial intelligence fields with local startups looking for more advanced talent for hard-to-fill positions.

Read: UTSA Catalyst Lab Connects ‘Hire-Ready’ Graduate Students to Startups

Another growing trend is how local high schools are jumping on the startup bandwagon. This year Alamo Heights High School launched its business incubator program while Northside School of Innovation, Technology and Entrepreneurship started its NSITE Mentoring Program.

In 2020 look for North East Independent School District’s Reagan High School to launch an entrepreneurial program

Bottom line: More local students inspired to become founders means more entrepreneurial inventors possibly becoming future innovators. It also means more students from across the U.S. working with San Antonio startups every summer.

What better way is there to spread the word about San Antonio’s potential as a city of innovation?

2. More spaces available for co-working

The most growth has been in the number of co-working spaces in San Antonio. From the seven on the first ecosystem map, we now have almost 30 co-working spaces available across the city.

In 2020 look for whether WeWork on Houston Street finally opens its doors for business, the launch of Henry Cisneros’ LaunchPad on the West Side, and a new co-working space open for business in the 410/Broadway corridor.

Bottom line: The growth in co-working spaces reflects how founders must manage costs when building a company. That the number of co-working places has more than quadrupled from early 2018 to late 2019 also points to more entrepreneurs interested in community and niche maker spaces, not just cost-effective places to connect and do business.

3. Some losses and gains in startup programs

Tracking changes in San Antonio’s ecosystem also means deleting entries. We lost four startup programs in 2019.

Both Patriot Boot Camp and 3D Startup lost funding and decided to leave San Antonio.

The closest Patriot Boot Camp program, which is focused on military members, veterans, and military spouses, is in Austin. We did, however, gain a new military-focused startup program in 2019. The Rosie Network helps military spouses gain the skills needed to become a successful entrepreneur.

Alamo Colleges also officially closed the doors on The Learning Company a year after the death of program director Hitish Nathani in 2018.

A new accelerator program designed for aspiring life science entrepreneurs joined San Antonio’s entrepreneurial ecosystem in 2019. UT Health San Antonio launched TechNovum, a new technology commercialization accelerator for faculty researchers interested in developing their inventions for the market. 

Read: UT Health San Antonio Launches New Accelerator for Researchers

In 2020 look for Art Tank, an incubator startup program for artists searching for a new home. LiftFund no longer can run it.

Bottom line: What San Antonio needs in 2020 is a robotics incubator program. Many robotics inventors are working out of garages who would benefit from participating in a well-supported startup program designed for this type of inventor.

4. More investor interest means more funding for startups

From Scaleworks’ milestones (Mailgun’s exit, its $80 million venture fund, and debt fund firm Element SaaS Finance) to Active Capital’s $20+ million funding for multiple B2B SaaS companies (Cloudsnap, Cliently, Sendspark, Back Office, FunnelAI to name some), 2019 was a good year of investors looking for and finding deal flow in San Antonio.

More distributed teams also mean more investment opportunities irrespective of company headquarters locationhence the interest in startups in accelerator programs such as RealCo‘s, for example.

Venture capitalists (VCs) are looking more in San Antonio for promising startups. Investors often diversify their portfolios as a cushion against market volatility, which makes San Antonio an excellent place to invest. We are getting better at standing out as a city with unique, diverse innovation capabilities in bioscience, deep technology, cybersecurity, and tech leveraged in various industries.

Software as a service or SaaS startups got the most attention from investors in 2019. Given the relatively low barriers to entry for cloud-based applications, it makes sense from an investment perspective to fund a SaaS startup that can begin generating recurring revenue quickly. Successful SaaS startups produce a faster return on investment than a medical device that requires FDA approval or a deep technology innovation with considerable research and development costs.

In 2020 look for more SaaS startup companies to move to San Antonio as our SaaS center of gravity continues to grow and attract national attention.

Bottom line: SaaS startups will continue to garner investor attention as VCs look for the next unicorn.

San Antonio Startup Ecosystem Map as of December 30, 2019. Credit: Startups San Antonio.
San Antonio Startup Ecosystem Map as of December 30, 2019. Credit: Startups San Antonio.

What to expect from San Antonio startups in 2020

Our prediction for 2020 is more innovative startup founders emerging from stealth mode. They’re not going to be all software as a service or SaaS startups, either.

People are developing new products based on scientific discoveries or engineering innovations. The addition of prototyping capabilities from CANopener Labs, plans for Port San Antonio’s innovation hub, and the inventor community quietly gaining ground at the San Antonio Museum of Science and Technology is helping to fuel innovation across San Antonio.

As the Port develops its innovation center, look for e-gaming leagues, more robotics and engineering startups, and more cybersecurity experts converging at the Port as a result.

Want to learn more about San Antonio’s startup ecosystem?

Check out Michael Girdley’s wrap up of San Antonio’s tech community wins for 2019.

You can also learn what we did from talking to local stakeholders about the San Antonio startup ecosystem needs in 2020 and beyond.

Read: What Does San Antonio’s Startup Ecosystem Need?

Featured image is of the San Antonio Startup Ecosystem Map as of December 30, 2019. Credit: Startups San Antonio.

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