Three of East Tennessee’s leading institutions are launching a collaboration to make the Knoxville-Oak Ridge Corridor a national innovation hub.
Oak Ridge National Lab, Tennessee Valley Authority, and the University of Tennessee System are partnering with global company Techstars to launch a startup accelerator that will grow 30 tech companies over three years.
“We believe this is the start of a future collaboration,” UT System president Randy Boyd told Knox News. “By working together we can have a profound impact in the community. I think Techstars is a great project in itself, but perhaps the biggest story is this new level of collaboration between these three organizations.”
Techstars’ Industries of the Future accelerator will specialize in startups using clean energy, artificial intelligence, cybersecurity, digital currency, 5G and big data to solve problems. Techstars was founded in 2006 and has invested in over 2,500 companies valued at over $ 209 billion.
Executives at UT, TVA and ORNL say partnering with a company that has helped launch startups in billion-dollar companies is the start of a broader vision to make of the corridor a national destination for entrepreneurs, investors and a skilled workforce.
The three entities share the $ 9 million cost of the accelerator.
Brookings Institution public policy organization identified East Tennessee as one of 35 metropolitan areas that could become “one of America’s next vibrant innovation hubs” in a 2019 study.
“This is just one step in the evolution of what I think Knoxville (needs) to reach the level of Silicon Valley or Austin or Research Triangle Park,” said the director of the ‘ORNL, Thomas Zacharia, at Knox News.
Startups focused on future problems
Techstars knows Knoxville. He completed an assessment of the entrepreneurial ecosystem in the Knoxville area and presented these findings in January.
The report identified market challenges, including attracting early stage funding, establishing support for growing companies, and opening doors for local research institutions and resources.
âWe felt that Knoxville could really benefit from a focus on entrepreneurship and technology that could take advantage of the capabilities of these big three institutions and add that as an important dimension to this economy,â said the CEO and TVA President Jeff Lyash at Knox News.
It will be Techstars’ first accelerator in Tennessee and the first affiliated with a national lab.
âIt’s kind of like a catalyst to ignite the entrepreneurial spark, if you will,â said Nancy Wolff, CEO of Techstars Accelerators. “It turns people on. People are coming out of the woods to get involved.”
Techstars will begin accepting applications for its first batch of 10 startups in July. Each accepted startup receives $ 20,000 from Techstars in exchange for a 6% stake in the company.
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Entrepreneurs will spend 13 weeks in the region and receive hands-on support to help grow their businesses. They set goals, connect with mentors, build a financial model, identify clients, create a product strategy, and refine their investor pitches in order to raise capital.
The accelerator will be led by CEO Tricia Martinez, founder of Wala financial services platform and a former student of the London Barclays Accelerator. She is laureate of the Presidential Innovation Fellow 2021 and worked with the Department of Energy to bring the technologies of the future to market faster.
Upon completion of the program, startups benefit in the long term from Techstars’ vast network of mentors, investors and entrepreneurs.
While there is no requirement to relocate to Knoxville, graduate startups could decide to stay in the area, resulting in more jobs, more economic development, and a reputation as an engine of innovation.
“Why does Silicon Valley exist? Because there is a belief system that you go there, you have the infrastructure that allows a founder to translate their idea into opportunities and be successful,” said Zacharia.
From “cordial” to gathering
These three institutions have a long history together, but the leaders are quite new in their roles.
Zacharia has worked at ORNL since 1987 and became director in 2017; Boyd was named UT president in March 2020 after a 16-month interim stint; Lyash was appointed in February 2019.
What was once a “cordial and collegial” relationship has deepened, Boyd said.
âWe’ve done a lot of things bilaterally together, we’ve had a lot of joint ventures where we’re working on a project for our mutual benefit,â Boyd said. “But this is the first time that the three of us have come together to do something that is primarily aimed at helping improve our community.”
Techstars has a history of “unicorns”
Most Techstars accelerators are suited to the community, like the Sports Technology Accelerator in Melbourne, Australia, or the Sustainability Accelerator in Boulder, Colorado. Some of these accelerators are partnerships with unique universities. Others, like the Indianapolis sports accelerator, are a partnership between several entities.
Wolff said 86% of companies that participated in a Techstars accelerator are still in business or have been acquired.
Nine unicorns – startups worth over $ 1 billion – went through a Techstars accelerator, including DigitalOcean, a cloud computing company which raised $ 775 million in its initial public offering earlier this year. Amazon bought Pill Pack, another Techstars alumnus, for an estimated $ 750 million in 2018.
Institutions also have a lot to gain from the accelerator. For UT, Boyd said it gives students access to mentorship and inspires future entrepreneurs to enroll in college.
TVA, which serves parts of seven states, has never invested in a local accelerator, Lyash said, but it could serve the utility’s missions of providing energy, fostering economic development and maintaining environmental stewardship.
âWe have technologies that can be used to drive this energy transformation, up to a point,â Lyash said. âBut beyond that point, we need technology at scale and at a cost, and with an impact that we don’t currently have. And who knows, maybe some of that will come out. of this accelerator project? “
Zacharia said that while innovators from Silicon Valley are welcome, he hopes the program can provide opportunities for disenfranchised local communities and create well-paying jobs for people already living in the region.
âThis is a unique opportunity, in my opinion, if some of the types of investments offered come to fruition,â Zacharia said. “And we certainly need to come together as a community to leverage and capitalize on this opportunity to transform our region for the better.”
Growth and Development Editor-in-Chief Brenna McDermott can be reached at firstname.lastname@example.org. Follow his work on Twitter @_BrennaMcD. Support our local information efforts by become a Knox News subscriber.