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ATI reports 28 new firms, $20 million for Austin economy

Friday, September 25, 2009 by John Davidson

Austin Technology Incubator gave its annual report to City Council Thursday and reported its efforts in the last year have had an overall economic impact of $20 million for the Austin area.


Director Isaac Barchas told City Council the non-profit incubator worked with 28 startup companies last year and graduated 11 of them. Those companies were able to raise $10 million in capital and created 110 jobs.


The incubator, which is owned by and housed at the University of Texas but receives about 40 percent of its funding–about $620,000–from the city via Austin Energy, works with local early-stage technology companies in the IT, clean energy, wireless technology and bioscience industries.


At Thursday’s council meeting, funding for FY 2010 was approved for the incubator’s bioscience and wireless programs in the amount of $125,000 and $200,000 respectively, each with two 12-month renewal options.


ATI worked with an economic consulting firm to determine that for every dollar the city invests in ATI, it translates to about $16 in investment in Austin companies. Another metric ATI calculated was dollars per job created, or how much the incubator had to spend to create a job, which was $5,500 to $6,000–far lower than in most other parts of the country, Barchas said. “The city is getting a lot of leverage out of the investment in ATI.”


Although ATI was initially established in 1989 as an incubator for the IT sector, it has since expanded with programs in wireless technology, bioscience and, in 2001, clean energy. ATI was the first incubator in the country to open a specialized clean energy sub-incubator.


“We’re seeing a lot more melding of the clean energy sector into the real economy, and I think the Pecan Street Project and the work that Austin Energy has been doing has been a catalyst for that,” Barchas said. “The relationship with Austin Energy has allowed us to bring in startups, rapidly validate their technology on Austin Energy’s grid and get them to market much more quickly.”


Bioscience has also been a fast-growing sector in the Austin area, according to Barchas. Last summer, ATI hired Jessica Hanover as director of the bioscience program, which this year is working with two pharmaceutical companies that have both platform and targeted therapeutic technologies, one to treat a side effect of cancer and the other that targets lung disease. “We think these will be very attractive companies going forward,” Barchas said.


To increase its bioscience capabilities, ATI is applying for a federal grant to build a wet lab incubator facility at UT for emerging bioscience companies, which Barchas says have the potential to become a powerful engine of economic growth for the region.


“We were surprised when we found out how much life sciences work there was in Austin,” he said. “We never really had an offering that could support life sciences companies, so bringing in someone like Jessica who can really help to build a life sciences company successfully has really taken off for us.”

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