Economics

Tech and Investment in Utah

Utah’s expanding tech sector has been a driving force in the enormous increase of venture capital investment into the state.

Robert Spendlove and Joseph Mayans May 31, 2019

Tech Employment in Utah

Utah has once again emerged as the top state in the nation for tech employment growth. According to CompTIA, Utah had the fastest growing tech workforce in the country at 4.3 percent in 2018, nearly double the national average of 2.3 percent. And while Utah’s overall tech workforce is smaller than the top tech states of California, Texas, and New York, it has grown significantly faster since 2011.

Utah’s tech sector has expanded in concert with the rest of the state. Over the past several years, Utah has consistently ranked among the best labor markets for strong employment growth and low unemployment. The robust labor market, relatively low cost of living, and access to outdoor recreation, have boosted the state’s population and allowed Utah’s tech companies to recruit top talent from around the country.

Despite Utah’s influx of economic migrants, there is still significant need for more workers. With Utah’s unemployment rate under 3 percent, companies must compete hard to find qualified labor. In tech, Utah has the opportunity to develop and recruit more women. The state currently lags the nation for females in tech occupations, though some improvement has been made in recent years.

Utah’s expanding tech sector has been a driving force in the enormous increase of venture capital investment into the state. When companies receive venture capital funding they often use it to construct buildings, buy equipment, and expand their operational footprint. These investments flow into the Utah economy and give the tech sector an outsized presence.

Net Tech Employment in Utah Continues to Rise

From 2017 to 2018, Utah’s net tech employment expanded by 4.3% — the highest rate in the nation.

Graph of net tech employment in Utah
Source: CompTIA Cyberstates 2019

Utah’s Tech Employment is Booming vs Top Tech States

Tech employment in Utah has grown by 35% since 2011, significantly faster than the largest tech states of California (21%), New York (18%), and Texas (16%).

Index graph of tech employment in Utah vs top states
Source: Author's calculation of CompTIA Cyberstates 2019 data

Utah has Opportunity to Improve with Women in Tech

From 2017 to 2018, the share of women in tech occupations in Utah rose from 17% to 17.5%. The national average is 21%.

Gender ratio of women in tech in Utah
Source: CompTIA Cyberstates 2019

Tech has a Growing Influence on Utah’s Economy

Utah’s tech industry made up 11.4% of the Utah economy in 2018, up from 6.6% in 2015.

Tech composition of Utah's economy
Source: CompTIA Cyberstates 2019

Venture Capital Investment in Utah

Venture capital (VC) investment is typically made into start-up and/or expanding companies that are unable to secure enough financing from traditional means. This type of funding is vital for the start-up ecosystem and Utah’s tech sector.

Prior to the mid-1990s, Zions Bank and Novell led the way in providing VC funding in the state. Their early efforts led to the creation of numerous other Utah-based VC firms, and now the state is home to nearly 60 companies that provide VC funding.

picture of tree of life for vc funding in Utah
Sources: Crunchbase, Sid Krommenhoek "The Flavors of Venture Capital in Utah"

The end of the Great Recession in 2009 marked a turning point in VC activity in Utah. Since then, there has been a significant increase in both the number of VC deals made and funding raised. From 2009 to 2018, the number of VC deals has risen by 152 percent and funding by 433 percent. And while overall VC activity in the state has declined from the banner years of 2014, 2015, and 2016, it remains well above historical levels.

Venture-backed companies in Utah have found significant success. Domo, Qualtrics, Pluralsight, InsideSales, and Health Catalyst all became “unicorns” in recent years, or private companies valued at $1 billion or more.

VC Deals and Investment into Utah Companies

In 2018, there were 63 venture capital deals made with Utah companies, totaling $800 million in investment.

Graph of VC deals and funding in Utah
Source: PwC/CB Insights Money Tree Report Q1 2019

What Type of Companies are Receiving VC Funding in Utah?

Utah companies received $800 million in venture capital funding in 2018. The majority of investment was made into internet companies (51%), followed by mobile & telecommunications (20%), and computer hardware (15%).

Graph of funding share for Utah companies
Source: PwC/CB Insights Money Tree Report Q1 2019

When are Utah Companies Receiving VC Funding?

Of the $800 million in VC funding Utah companies received in 2018, the majority of investment was at the expansion stage.

Infographic of share of funding at stage in Utah startups
Source: PwC/CB Insights Money Tree Report Q1 2019

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