Business & Real Estate

Here’s Sacramento’s surprising rank on a new list of best cities for startup companies

Long seen as little more than a government town, Sacramento is rising in the ranks of cities where young entrepreneurs and startup companies want to stake a claim.

A new analysis ranks Sacramento as the 11th best area in the country for startup companies, as it increasingly becomes a landing spot for young workers and businesses who find Bay Area rents and real estate tough on fledgling businesses.

Four California cities made the national top 20, including San Francisco at No. 5, Oakland at 14 and San Diego at 16, according to CommercialCafe, a national internet-based commercial real estate blog and data provider.

Austin ranked No. 1 one, followed by Washington, D.C., and Seattle.

The ranking suggests a recent push by Sacramento Mayor Darrell Steinberg and business leaders to link the city to the Bay Area as a super-regional tech and startup incubator is paying dividends.

“The once sleepy government town is ripe for new tech companies to take shape here and feed the early-stage startup scene,” analysts at CommercialCafe wrote.

The CommercialCafe analysis found, in particular, that Sacramento has seen a 45 percent increase during five recent years in the number of computer, engineering and science jobs.

The region also has seen an influx of young, educated workers. It ranks No. 1 among mid- and large-size cities nationally in the recent growth rate of people in their mid-20s and 30s who have a bachelor’s degree in science or engineering .

The city was chosen by commercial real estate company JLL in 2017 as one of a handful of “hidden gem” cities nationally where recruiters could find young employees, where real estate is still affordable, at least by coastal California standards, and where the economy is solid.

The Bee recently highlighted some of those workers who are Sacramento natives, called Lady Birds, who returned home to their roots to launch businesses.

Not all of tomorrow’s Sacramento workforce currently lives in Sacramento, though.

SkySlope, a downtown cloud-based real estate technology business, often found itself interviewing Bay Area workers interested in making the move to Sacramento.

“They all say the same thing – they’re looking for an affordable place to live and work with good schools. They feel comfortable here. It’s familiar,” executive D. J. Stephan told The Bee last year.

Sacramento city officials say they want to attract more startups and young workers in the next few years who otherwise would have chosen the Bay Area as their professional launching site. The 240-acre downtown railyard redevelopment site, where investors plan to build a professional soccer stadium, medical center and light rail station, is being pitched as a place where startups can thrive, a few blocks from downtown and the state Capitol.

The Greater Sacramento Economic Council, a regional business recruitment group, has been part of the push to position the Sacramento region as a startup hub.

“As we assist startups desiring to locate in the Greater Sacramento region, one of the main selling points is the access to talent and the second point is the affordability factor,” a GSAC spokeswoman wrote on Monday. “Sacramento is truly moving from being a government town and startups are seeing the advantages of locating in a region that retains a well-educated workforce and the costs associated with building a new business are not astronomical.”

Applied Spectra, Saturas, Biome Makers, CHEERS and Zenify are among a handful of companies listed by GSAC as key players in the evolving new Sacramento.

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