Atlanta’s tech sector to prospect for capital, attention, in Silicon Valley
By David Pendered
There’s just something about a $19 billion price tag on a business acquisition that catches the eye.
This figure has to be in the back of Atlanta Mayor Kasim Reed’s mind as he prepares to lead a trade delegation to Silicon Valley. The group has meetings with 12 venture capital companies and social media platforms to invite them to invest in Atlanta tech companies.
The $19 billion is the sum Facebook has agreed to pay to purchase WhatsApp, a messaging giant. WhatsApp has more than 450 million monthly active users, and more than 70 percent of them are active each day, according to techcrunch.com.
The promise embodied in the proposed WhatsApp transaction is the type of deal that fuels metro Atlanta’s technology sector. There’s the hope cited by Georgia Tech students that their work will improve the overall quality of life. There’s also the hope of a big payoff if the market embraces their work.
The Atlanta delegation hopes to attract investment and the interest of companies including Google, Facebook and Cisco, according to a statement released by Reed’s office.
There’s no promise that, even with California start-up money, Atlanta will become home to a future version of the WhatsApp deal. But Reed certainly is promoting the city as a future tech hub.
“Atlanta has long been a city that welcomes and nurtures talent, entrepreneurship, and innovation,” Reed said in the statement. “I am confident that this trip will enable us to position our city as an ideal location for long-term tech investments and ensure that Atlanta’s technology sector continues to grow and thrive.”
Atlanta lawyer John Yates is slated to make the trip. Yates heads the technology practice at Morris, Manning & Martin and has focused on the tech sector for some 30 years.
“Atlanta is one of the most attractive cities in the United States for Silicon Valley investors,” Yates said in the statement. “We have the ingredients venture capitalists seek – major universities, talented entrepreneurs, leading incubators and active angel investors. And two-thirds of VC investment last year was in areas where Atlanta is a leader – information technology, healthcare and financial services.”
However, just 5 percent of all venture capital investment goes to the southeast, according to the statement. That said, metro Atlanta is ranked 12th in the nation in terms of tech start-ups, according to the release.
One example of fledgling success by an Atlanta-based tech start-up is CardioMEMS, a which grew from research based at Georgia Tech. The company is focused on a device the size of a paperclip that can be permanently implanted in the human body to improve the quality of life for people with heart failure and hypertension.
Sales at the privately held company could reach $259 million in 2017 if the device wins approval from the U.S. Food and Drug Administration, according to a report by a Wells Fargo analyst. A FDA panel in October determined the product is safe, but did not indicate whether the product is closer to full approval, according to medcitynews.com.
The group plans to provide updates of the trip via Twitter at #ReedSVTour.