San Diego Business Journal

As more entrepreneurs and investors relocate from traditional tech hubs to emerging startup ecosystems, San Diego — with its Mediterranean climate, diverse population and growing venture capital scene — has quickly become a desired tech hub. 

In 2020, high-profile founder Zeb Evans chief executive of ClickUp moved to San Diego, a company now valued at $1 billion after receiving a $100 million investment from investors in December last year.

On top of that, the region attracted several big-name investors at the start of 2021, signaling that there’s increased attention on San Diego’s tech hub among tech investors. 

While San Diego’s tech ecosystem isn’t as robust as San Francisco’s, for example, more startup founders and investors in San Diego could boost the area’s tech scene, which raised over $5 billion in venture funding last year, according to Crunchbase data.

Newly Headquartered

ClickUp’s Evans moved to San Diego in January 2020 after living in San Fransisco for about five years. In search for a better quality of life, he visited San Diego and shortly after decided to move the company to San Diego’s downtown Gaslamp District. 

Since moving, the company has begun attracting top talent from cities around the world, many coming from New York and Los Angeles, according to the firm. 

“Like many tech startups, I originally thought we had to be in San Francisco to be successful. As soon as I found out that wasn’t true, we started looking for places with a better quality of life. The day that I visited San Diego for the first time, I fell in love with the city. I knew it was our new home,” said Evans. 

“We have been able to hire locally at a rapid pace to help make us the unicorn we are today. San Diego will always be ClickUp’s home,” he said. 

The Great Migration

While San Diego has continued to draw more tech investors and founders over years, the COVID-19 pandemic seemed to accelerate the rate of migration. 

Neal Bloom, chief executive at Rising Tide Partners and former chairman at Startup San Diego, described the influx as a “big wave.” Throughout 2020 Bloom met recent transplants to San Diego. 

He also heard about more investors in the tech world quietly moving to the North County area. “I’ve been seeing people move here for years,” said Bloom. 

“I’ve been getting a first intro to “a friend who’s moving to SD,” because usually a spouse has family in town and they want to be closer while raising their family. Post-Covid, it seems people are moving here regardless of a local connection,” he added. 

Welcoming Government

Primarily, the migration is being driven by a combination of the high cost of living and perceived quality-of-life challenges.

Another major factor is San Diego’s new Mayor, Todd Gloria, who has been vocal about the upsides of living and building in San Diego, welcoming the next wave of startups looking to build here through social media channels such as Twitter. 

This is what initially attracted Jaime Schmidt and Chris Cantino, co-founders and managing partners of Color Capital. Founded in 2016, the inclusive venture capital firm relocated to San Diego in February 2021.

“We chose to relocate to San Diego for its economic and cultural diversity, and emerging consumer and software markets in addition to its well-established technology ecosystem,” said Cantino. 

“We believe San Diego is the most underrated startup city in the nation, and we’re getting in early on a major upswing. Also, the fact that new mayor Todd Gloria has gone out of his way to welcome fresh consumer energy into the city on Twitter also bodes well for the next wave of startups looking to build here,” he added. 

Access to Major Markets

In addition, San Diego has also become home to several relatively new startups including Datyra and Backbar Solutions, to name a few. 

Datyra, a blockchain and artifical intelligence consultancy firm, relocated from Seattle to San Diego roughly two years ago and has grown to 30 local staffer during that time.

“We decided to build our business in San Diego for a few reasons,” said Nathan Klarer, co-founder and chief operating officer at Datyra. “First, the business community was welcoming which allowed us to acquire a number of clients. Second, a significant portion of our staff is in Mexico and easy access to Tijuana Airport via the CBX terminal was a major advantage.”

“So I’d say the decision to move worked out great,” he said. 

More recently, BackBar Solutions, an early-stage startup focused on the hospitality industry, moved to San Diego earlier this year. 

“We choose San Diego because it provides us access to major markets while also allowing us to get all the West Coast benefits, especially for a young company like ours who hasn’t raised an absurd amount of money,” said Kevin Monpara, co-founder and chief strategy officer at BackBar Solutions. 

“It was a long term strategy for us. It’s also more affordable to grow compared to other cities,” he added. 

Remaining in San Diego

Stephen Wemple, an investor at Spero Ventures, began considering a move away from San Francisco after COVID-19 took hold in early March, noting that his firm is now remotely distributed across the U.S.

“Post-covid, its currently unknown what exactly our organization will operate like and where we will all be headquartered,” Wemble said. “Personally, I had a long-term vision to be living in San Diego.” 

Wemple briefly considered Los Angeles, but ultimately decided on San Diego. He moved to the La Jolla area in mid-summer last year and plans to remain until further notice.

“Overall, second tier tech cities will continue to benefit greatly from COVID,” Wemple said, adding that entrepreneurs and investors no longer have to be in a certain place to attract the best talent.

“They can now lean on distributed talent, more easily,” he said.

Looking ahead, Wemple said if he ends up staying long-term in San Diego, it will be for personal reasons, though the growing tech scene is an added bonus.

“It’s a combination of the good weather, the ecosystem is sort of young and hungry and trying,” Wemple said. “The best part of San Diego, is that people tend to keep their work and hobbies separate from one another, more so than they do in other big cities … it’s much more than working nine to five job here.”