Wrapping up 2020: How Did San Antonio’s Startup Ecosystem Change?

By Iris Gonzalez
Watershed Idea Foundry cadaver lab helps inventors test prototypes, credit Startups San Antonio

San Antonio’s entrepreneurial ecosystem has evolved in 2020, but our predictions at the end of 2019 certainly didn’t account for a global pandemic.

What has changed in San Antonio’s startup ecosystem since the beginning of 2020?

We’ve been tracking San Antonio’s startup landscape to maintain the San Antonio Startup Ecosystem Map (an entrepreneurial ‘life cycle’ graphic listing local resources for those interested in the startup life) since our first map version (February to November 2018). 

What changed in San Antonio's startup ecosystem in 2020? Read our year in review. Click To Tweet

We noted five significant trends emerging in San Antonio over the past year.

1. There’s venture funding for San Antonio startups

“Startups end the year in a surprising deal frenzy.”

It’s the fitting headline of a December New York Times article on startup investing trends. Investors often tell me how they search for suitable companies to invest in.  Increasingly, they’re investing in San Antonio startups.

Here are some San Antonio venture funding highlights from 2020:

2. We have more bioscience and engineering startup resources

We’ll remember 2020 as the year science triumphed. Multiple COVID-19 vaccines are getting prepped for distribution less than a year after the outbreak of the Coronavirus.

Let’s not forget San Antonio’s scientific contributions to the pandemic response from Texas Biomedical Research Institute, UT Health San Antonio, Xenex disinfecting robots, Knight Aerospace, and others.

The bioscience and healthcare sector employs nearly a fifth of San Antonio’s population. As more entrepreneurially-minded scientists look to commercialize an idea for the market, the need for specialized programs is greater than ever.

Three valuable resources we were missing in our ecosystem are now available.

3. There were losses, but also important gains in startups spaces

Co-working is much more than desks and chairs. San Antonio finally has rentable wet lab space, for starters.

Spaces for startups may not look like it did before March 2020, but these spaces still offer cost-effective places for smaller working pods of people to assemble, test, and develop ideas, connect with others, and do business.

Losses: The most growth in our entrepreneurial life cycle over the past three years has been in the number of co-working spaces in San Antonio. There were seven listed on our first ecosystem map in early 2018. At our highest point at the start of 2020, we had over 35 different types of spaces for startups available across the city.

Since March, when the pandemic was declared, we’ve lost six co-working spaces:

  • Annex Co-Working
  • The Garage
  • Handimade Maker Space
  • Henry Cisneros announced he would no longer build out the Launch Pad.
  • Space on the Fly
  • WeWork (no activity in their proposed space on Houston Street since 2019)

Small co-working spaces had (and are still having) a harder time surviving the pandemic since the reduced capacity of an already small revenue base isn’t sustainable. 

Gains: The rise over the past couple of years of specialized spaces for other industries means founders can now rent space in commercial kitchens, film and video studios, bioscience wet lab and manufacturing rooms, and maker spaces across San Antonio.

We’ve gained some much-needed spaces for emerging companies:

4. Specialized food startups are growing in San Antonio

Food tech startups and regenerative agriculture food companies are gaining ground in San Antonio. Why?

The driving forces shifting interest in food tech include climate change, digitalization opportunities, and health-focused consumers pushing for more choices. 

The interest in regenerative food systems and agricultural practices has also been growing in the investment community. Regenerative agriculture can help mitigate climate change, improve soil health, and support rural communities as we gain better food choices from sustainably raised animals.

The low-carb spent-barley grain alternative flour company Grain4Grain won the top prize at this year’s Tech Fuel pitch competition. And beetle protein powder company Manna Foods moved to San Antonio to grow its rapidly scaling company here. 

Regenerative agriculture got a much-needed boost when Scaleworks co-founders launched Soilworks this past summer. Since then, they’ve launched Wholesome Meats and Grazing Lands (Grazing Lands is slated to open in January).

5. Students are interested in the startup life

We’ve gained three new student entrepreneurship programs in 2020. Many students are working virtually with mentors to learn Startup 101.

Local high schools are jumping on the startup bandwagon. This year, Northside School of Innovation, Technology, and Entrepreneurship started its NSITE Mentoring Program. North East Independent School District’s Reagan High School Business INCubator was also launched this fall. 

Hallmark University’s Eastside Cyberforce Prime added free cybersecurity training which debuted in March. Applicants who complete the eight-week IT Boot Camp earn two information technology industry certifications and are accepted directly into Hallmark’s bachelor’s in cybersecurity degree program. 

Closing thoughts

COVID-19 has accelerated years of tech adoption into months. Pandemic-triggered trends such as remote working, wider use of cloud-based collaborative tools, robotic automation replacing workers in crowded facilities, and financial tech solutions to help people coping with reduced income can all be seen in San Antonio’s ecosystem (6Connex, Stirista, Tint, Plus One Robotics, FloatMe, just for starters). 

One game-changing development is the investment Port San Antonio is making with its $60 million state-of-the-art innovation center slated to open in 2022. The new maker space, e-gaming arena, and home for the San Antonio Museum of Science and Technology will help connect San Antonio’s community of innovators with educators and technology employers for more workforce development opportunities.

I’ll only make one prediction: We’ll have more investment firms committed to accelerating the growth of San Antonio startups opening in 2021. 

We’re certainly living in interesting times. Here’s to 2021 bringing even more impressive developments that will help grow San Antonio’s innovation landscape.

The featured image is of the Watershed Idea Foundry cadaver lab, which helps biomedical inventors test prototypes, credit Startups San Antonio

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