Billionaire investor Steve Case is enthusiastically backing a hypersonic aircraft company called Hermeus, which aims to develop a Mach 5 aircraft that can transport passengers from New York to London in just 90 minutes. This speed is about twice as fast as the Concorde and five times faster than current transatlantic flights. What particularly excites Case is that Hermeus was founded by a graduate of Georgia Tech and is based in Atlanta, rather than the traditional tech hubs of New York or Silicon Valley.
Case believes that Hermeus is just one example of the larger argument he has been making for years - that investments should be made outside of the traditional venture capitals and in places often overlooked by investors. Through his investment firm Revolution, Case has been championing startup ecosystems in what he calls "Rise of the Rest" cities, which are essentially rising entrepreneurial hubs around the US. He argues that the Covid-19 pandemic has further accelerated this trend, as people have reevaluated where they live and work.
While the San Francisco Bay area, New York City, and Boston still dominate the venture capital scene, Case points to Texas as a prime example of the shift occurring. Texas, which used to receive just 2% of all venture capital funding a decade ago, now accounts for 4% of the national total, according to Case. This can be attributed, in part, to the attractive incentives and business-friendly environment that states like Texas offer, as major corporations relocate to areas such as Austin, Dallas, and Houston.
However, Case believes that the startup scene in these cities often goes unrecognized compared to the attention garnered by corporate moves. He stresses the importance of collaboration between startups and legacy companies in order to drive innovation and create a thriving digital economy. Often, there is a divide between the two, with startups operating separately from the established corporations. Case sees this as a missed opportunity and encourages more partnerships and interactions between the two sectors.
With his experience and success in investing outside of traditional hubs, Steve Case's vision for a more diverse and inclusive startup ecosystem is gaining traction. Through Revolution, he has made over 200 investments across the country, supporting companies that are pushing boundaries in sectors such as agriculture, artificial intelligence, and productivity. As the entrepreneurial landscape continues to evolve, Case's philosophy and investments serve as a testament to the potential and growth opportunities outside of the conventional centers of innovation.