The past few months have been unlike any in the history of Miami’s business and tech ecosystem. But while the city may be the sweetheart of the moment, Miami-Dade must keep up the momentum and take nothing for granted.
That caution came Thursday in a virtual round-table hosted Thursday by the Greater Miami Chamber of Commerce and moderated by newly appointed Miami-Dade Beacon Council One Community, One Goal Vice President Matt Haggman. During the session, leaders in Miami’s tech and venture ecosystem spoke of the need to seize the moment and take nothing for granted — not even the very factors that led the city to this very moment.
“We have to be holding ourselves accountable and not getting comfortable with the narrative that Miami is a diverse place and that that’s good enough,” said Raul Moas, Knight Foundation program director for Miami.
Miami, at least on paper, has one of the most racially and ethnically diverse tech scenes in the nation. According to industry association CompTIA, Miami ranks No. 1 in a diversity index quartile score that takes into account a region’s relative surplus of minorities. The region also has a strong cohort of female tech leaders, a status reflected in the recent launch of EndeavorLAB, a two-month accelerated growth program designed by tech mentorship group Endeavor Miami to support local early-stage companies led by women and minority founders.
Too many founders, including minorities, “were going outside South Florida to get investment,” said Endeavor Miami managing director Claudia Durán.
Yet equitable access to capital remains a hurdle, panelists said. South Florida startups have seen an unprecedented run over the past three years when it comes to raising funds, with more than $6.5 billion invested in South Florida startups, according to a report compiled by eMerge Americas. Yet of the 10 cities mentioned in the eMerge report, the 156 deals the South Florida region signed were the fewest — suggesting a lopsided distribution to a few select firms.
Indeed, few of the developments and successes Miami has seen in recent months have included minority founders.
The problem isn’t unique to Miami. Haggman noted the share of female founders funding to female-led startups nationally fell in 2020, as did the proportion of dollars to female-only founders.
But it should, in theory, not be an issue in a city known for its diversity.
“This is a real problem,” Haggman said. “If companies of the future are being created through venture funding, and such a narrow percentage of the population is receiving that funding or enjoys out-sized access to friends-and-family fundraising rounds ... we are going to continue seeing an equity divide.”
The share of venture capitalists who are themselves minorities nationally remains stuck at 1%, Haggman noted — a fact he called “appalling.”
Moas echoed the sentiment, noting that parts of the local investor class still don’t enough look like the community it is based in.
“That’s an area for growth,” Moas said.
Another sticking point: The influx of and spotlight on newcomers risks alienating longtime tech ecosystem members. Local tech leaders must be watchful that the recent arrivals do not end up creating silos of “old” versus “new” Miami tech communities, Moas said.
“We need to be stitching together the community and cross-pollinating,” he said, pointing to young professional organizations and Endeavor Miami as potential avenues for doing so.
Still, the opportunity is unprecedented, said panelists.
Leading off the round-table was Manny Medina, viewed by many as the godfather of Miami’s tech scene for having brought the NAP of the Americas telecommunications hub to the city’s urban core. In 2014, Medina inaugurated the eMerge Americas tech conference, the largest of its kind in the region. More recently — and in the span of just two weeks — Medina’s two tech startups, data center group Cyxtera and cybersecurity firm Appgate, both went public in billion-dollar deals.
Medina noted that it has taken at least a decade to reverse Miami’s brain drain and previous reputation as the furthest thing from a tech hub. New York, Silicon Valley, and even Houston were seen as more viable options when he planted the city’s tech roots.
“It was, ‘If you want to learn how to bartend, you should come here,’ ” he said. “Otherwise, don’t bother.”
But today, Medina said, Miami’s tech scene has never been better positioned to take off.
“The pump is primed,” he said.
Though the movement south among high-profile firms like Blackstone began before the pandemic, the outbreak of COVID-19 accelerated the trend. Then, Miami Mayor Francis Suarez, sensing an opportunity, began courting Silicon Valley types on Twitter, further juicing the city’s innovation community.
Today, the list of firms or executives opening or relocating to Miami is extensive. It includes Silicon Valley venture capital giants Founders Fund and SoftBank International — whose CEO, Marcelo Claure, announced a new, $100 million initiative to invest in Miami tech startups; Shutterstock founder Jon Oringer; celebrity messaging site Cameo CEO Steven Galanis; Barstool Sports founder and CEO Dave Portnoy; tech startups including revenue stream trading platform firm Pipe; Wonder Inventions, a new project by recently transplanted tech entrepreneur Howard Lerman; and smart mattress company Eight Sleep.
And these are only the new arrivals. A slew of longtime Miami firms have also experienced pandemic-era successes. Caribu, a virtual reading platform, has seen stratospheric growth amid the pandemic. Nearpod, an education technology company, was purchased for $650 million by a global provider of K-12 software and assessments. Papa, the family on demand company, received an $18 million investment from Comcast, while dining software providers Speed E-Tab was purchased by Wix — both based in South Florida. And Miami-based REEF Technology continued to grow as it received a $1 billion investment. And the Knight Foundation announced a $15 million investment in Florida International University, the University of Miami, and Baptist Health to bolster their innovation efforts and grow the local talent pipeline.
Some may be tempted to dismiss the current Miami tech moment as another in a long line of hype cycles. But Shu Nyatta, managing partner at SoftBank, told the panel that hype itself is a rare commodity that must not be squandered; the only thing worse than hype is having no buzz at all.
“People hating on the hype have it completely wrong,” he said. “It’s a really valuable resource that should be tapped to generate momentum.”
And Miami’s diversity advantage points the way. Disruption, Nyatta said, has become a tired concept. Instead, inclusion is increasingly seen among cutting-edge venture capitalists as the more important opportunity. The world is getting more diverse, and having a room filled solely with white males will eventually see diminishing returns.
Miami, Nyatta said, “has a chance to not be disruption capital but inclusion and enablement capital.”
This story has been updated to correct the total amount the Knight Foundation gave to Florida International University, the University of Miami, and Baptist Health. It was $15 million, not $115 million.