Chattanooga Finds Fresh Identity as a Tech, VC Hub

Chattanooga, Tenn., one of many first locations within the nation to put in a citywide fiber-optic gigabit-speed web cable, boomed through the pandemic because of an inflow of distant staff and enterprise capital-backed startups, its mayor mentioned.

Tim Kelly,

a businessman and startup founder who was inaugurated in April of final 12 months, mentioned the town acquired roughly 10,000 new residents between March 2020 and August 2021, based on a survey of people that initiated electrical service at the moment. He credited distant working through the pandemic for the rise, including that transplants had been drawn to Chattanooga by its superfast web and top quality of life.

“Weirdly, the pandemic had this silver lining for us,” mentioned Mr. Kelly, a Chattanooga native. “The city kind of fell upwards.”

Chattanooga Mayor Tim Kelly in The Wall Street Journal’s New York workplace.


Steven Rosenbush / The Wall Street Journal

Chattanooga is without doubt one of the many smaller U.S. cities whose populations grew or held regular final 12 months, whereas a lot of the nation’s greatest cities skilled deepening inhabitants declines because the pandemic continued to encourage Americans to seek for extra space, based on census estimates launched Thursday. As of July 2021, Chattanooga had about 182,000 individuals, up barely from July 2020, the census figures confirmed.

The metropolis made early tech investments in 2010 when EPB of Chattanooga, the city-owned energy distribution and telecommunications firm, rolled out a gigabit-speed fiber-optic spine. In 2015, the community was juiced to supply speeds of as much as 10 gigabits a second.

Since then, residents of the town have been having fun with the pace: a two-hour, high-definition film, for example, will be downloaded in roughly three seconds, Mr. Kelly mentioned.

Chattanooga has benefited from a rebalancing within the tech trade from main coastal metros to cities throughout the nation, he added. A current report from the Brookings Institution reveals tech hiring within the first 12 months of the pandemic slowed in locations like San Francisco, Seattle and Los Angeles and grew in markets like St. Louis, Philadelphia, San Antonio and Nashville.

Chattanooga has caught a number of the overflow, mentioned

Cameron Doody,

a co-founder of Brickyard, an early-stage enterprise fund primarily based in Chattanooga. As staff from established tech hubs flooded locations like Atlanta and Austin, residents of these cities moved to locations like Chattanooga, he steered.

“People come here and are like, ‘This reminds me of Austin 20 years ago’,” mentioned Mr. Kelly. “As mayor, I’m now presented with this kind of Goldilocks problem.”

Part of Chattanooga’s development will also be attributed to native enterprise capital and startups, he added. Mr. Doody’s Brickyard invests in tech firms from world wide, whose founders then come to intensively work on their product at its headquarters in Chattanooga, the place they’ve entry to a sauna, a steam room, a fitness center and a chilly plunge.

There are not any strict guidelines on how lengthy they might keep in Chattanooga and no set schedules for demos, he mentioned.

“When you’re trying to find product/market fit, you just have to put your head down and grind,” mentioned Mr. Doody. “So it’s a space for founders to remove distraction, but not isolate.”

In its first eight months, Brickyard has invested a complete of $3 million into 15 firms that run the gamut from gaming to crypto to logistics, Mr. Doody mentioned. He expects 70% to 80% of the businesses will select to place down roots in Chattanooga in the long term, he mentioned.

Cameron Doody, co-founder of enterprise fund Brickyard.


Steven Rosenbush / The Wall Street Journal

Mr. Kelly mentioned Chattanooga doesn’t supply the monetary inducements to maneuver that different cities have, and he as an alternative focuses on fostering a tradition households can thrive in.

Mr. Doody mentioned the shift in the way in which the town courts expertise is like transferring from a business-to-business mannequin to extra of a business-to-consumer mannequin. Instead of reeling in “the whales,” or massive firms, it’s now about creating an surroundings that appeals to particular person expertise, he mentioned.

“They can build the right features and solve the right problems in the city that actually matter, and aren’t just convincing some big corporation to move there because you get the perks or the kickbacks,” mentioned Mr. Doody. “That’s great accountability for cities.”

Another objective, Mr. Kelly mentioned, was closing the wage hole within the metropolis by investing in training and nurturing small companies. The metropolis presents free broadband to all college students who obtain free or decreased lunches or Supplemental Nutrition Assistance Program advantages, he mentioned.

As the pandemic adjustments how — and the place — professionals work, some smaller cities and areas are providing hefty relocation incentives to draw distant staff to assist jumpstart their native economies. WSJ met one household who accepted a suggestion to make a brand new residence within the Ozarks. Photo: Craig Kauffman for the Wall Street Journal

Write to Isabelle Bousquette at

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