Talent, venture capital, and incentives continue to strengthen Washington, DC’s tech ecosystem
Washington, DC is the heart of a booming regional tech hub, home to leading companies, growing brands, and innovative startups. The metro area’s robust talent pool, funding environment, and public support of the industry continue to demonstrate the District’s unique competitive advantage for tech companies.
A hub for tech talent, VC funding, and policymaking
The core draw for DC tech companies continues to be the region’s highly skilled and diverse talent pool with the DC metro recently ranking #3 in the country for tech talent on CBRE’s Scoring Tech Talent report. With 259,000 tech workers in 2021 (a nearly 6% increase from 2016), the report recognized the region as a top tech education market with degree completions in tech-relevant programs estimated to have increased by 25% from 2016-20.1
As shown in the table below, the DC market is highly competitive for tech talent and provides companies with access to employees with both technical and core support skills in business, marketing, and finance. With a location quotient of 2.03, the region is estimated to have a share of IT employment that is twice the national average.
|Metro Area||IT Employment||LQ|
|New York-Newark-Jersey City, NY-NJ-PA MSA||319,738||1.05|
|Washington-Arlington-Alexandria, DC-VA-MD-WV MSA||215,892||2.03|
|Los Angeles-Long Beach-Anaheim, CA MSA||206,040||0.99|
|San Francisco-Oakland-Berkeley, CA MSA||167,004||2.06|
|Dallas-Fort Worth-Arlington, TX MSA||160,884||1.24|
|Seattle-Tacoma-Bellevue, WA MSA||156,931||2.30|
|Chicago-Naperville-Elgin, IL-IN-WI MSA||143,812||0.96|
|Boston-Cambridge-Newton, MA-NH MSA||134,944||1.50|
|San Jose-Sunnyvale-Santa Clara, CA MSA||126,572||3.37|
|Atlanta-Sandy Springs-Alpharetta, GA MSA||115,718||1.22|
Source: JobsEQ. 2022 Q1: Information Technology (CTE Cluster). IT employment includes occupations such as computer systems analysts, information security analysts, computer programmers, and computer network architects.
In addition to talent, District companies benefit from a steady flow of venture capital funding into the region. The DC metro area recently ranked #11 on Startup Genome’s global ranking of startup ecosystems, with total VC funding reaching $13 billion between 2017-21.2 In this year’s third quarter, District companies alone raised $485 million across 28 deals.3 This included a $315 million mega-round for Pie Insurance, which was reportedly the largest funding round for any domestic insurance tech company this year. GiveCampus, an edtech fundraising platform, and Arthur, an AI performance company, together raised $92 million.
Locating in the District also provides companies with proximity to the federal government, a critical consumer of cybersecurity and IT modernization services. Companies can closely track federal regulatory policies for emerging technologies such as AI and blockchain while connecting with core decision-makers and industry leaders. In one example of this synergy in action, the first Quantum World Congress will be held in the District at the end of November, bringing together developers, legislators, and experts to discuss the value and future of quantum technology.
Recent announcements from the District
Several recent announcements from the District demonstrate these market advantages for leading tech companies:
- FiscalNote goes public
District-based FiscalNote was founded in 2013 with a mission to leverage AI technology and data analytics to provide global policy and market intelligence. The SaaS company is headquartered in downtown DC and has grown to approximately 800 employees with operations in eight countries.4 In August 2022, the company officially went public after reaching a $1 billion valuation and began trading under the symbol “NOTE.” FiscalNote received a District grant of $750,000 to support the company’s growth in 2017 and has become an anchor of DC’s tech sector.
“The Mayor’s office has been a tremendous partner for us as we’ve grown within the DC tech ecosystem. There has been no better place for us to build our business than Washington, DC.” – CEO Tim Hwang, FiscalNote5
- Arcadia announces new funding and Salesforce partnership
Founded in 2014, Arcadia is a District-based climate tech startup helping consumers to switch to clean energy. The company created a data-driven digital platform that compiles datasets from electric utilities and allows customers to match with renewable power sources that best fit their needs. The company continues to grow and in May completed a $200 million funding round, reaching a valuation of $1.5 billion.6 Most recently, Arcadia announced a new partnership with Salesforce to integrate its Data Connector with the Net Zero Cloud, allowing companies to make better environmental decisions with access to verifiable, global energy data.7
- Fintech company Caribou Financial reaches a $1.1 B valuation
Caribou Financial, formerly MotoRefi, is an auto fintech company founded in 2016. The company combines financial expertise with technology for flexible and trusted auto refinancing services. In 2021, the company decided to relocate its headquarters from Arlington, VA to the District. Caribou has grown to nearly 500 employees and closed on a $115 million funding round in May, reaching a valuation of $1.1 billion.8
District support for tech and innovation
To support other companies looking to expand, the District continues to make significant investments into the tech sector and innovation efforts. Applications are open for the Vitality Fund, an incentive that supports companies to relocate, expand, or stay in DC. Companies operating in tech industry subsectors including big data, cloud and computer systems, edtech, and foodtech are all eligible to be considered for Vitality Fund awards.
Qualified High Tech Companies may also claim tax benefits, including a reduced capital gains tax rate on qualifying investments, a new hire wage and retraining tax credit, and a 5-year freeze on real property taxes for eligible office improvements. QHTCs may also be eligible for a tax rebate of up to $1M annually for five years to assist with office improvements through the Creative and Open Space Modernization (COSM) Tax Rebate.
The District is also committed to advancing equitable economic development in the tech sector. The city has recently announced a new $2 million round of the Inclusive Innovation Equity Impact Fund for early-stage enterprises as well as the Penn West Equity and Innovation District in the Golden Triangle neighborhood. The innovation district will build off of the presence of four key tech sectors in the District—medtech, govtech, fintech, and edtech—to nurture and retain talent and develop a highly competitive workforce in DC.
The District provides the right talent, funding, and supportive ecosystem for tech companies to expand their operations in an innovative and vibrant landscape. For more information on technology and innovation in the District, reach out to Audrey Polk, VP of Corporate Attraction.
Image courtesy of DC Startup Week, an annual event for startups and entrepreneurs in the District.
1. CBRE. (2022). Scoring Tech Talent 2022.
2. Startup Genome. (2022). Global Startup Ecosystem Ranking 2022: Washington, DC.
3. Althouse, Michaela. Technical.ly. (October 13, 2022). In Q3, DC-area companies raised nearly $700M in venture capital.
4. Clabaugh, Jeff. WTOP. (August 4, 2022). DC’s FiscalNote rings NYSE opening Bell after Monday’s IPO.
5. Quote source: Executive Office of the Mayor. (August 4, 2022). Mayor Bowser Celebrates FiscalNote Public Listing on NYSE.
6. Spector, Julian. Canary Media. (May 10, 2022). J.P. Morgan leads $200M investment in Arcadia’s clean-energy platform.
7. Arcadia. (September 20, 2022). Arcadia Announces Data Connector on Salesforce AppExchange, the World’s Leading Enterprise Cloud Marketplace.
8. Althouse, Michaela. Technical.ly. (May 24, 2022). Money Moves: A Caribou becomes a unicorn with a $115M Series C.