Smaller cities are making a talent grab as workers exit the coasts

Even with layoffs on the rise and investors telling founders to trim their costs and expenses, tech employees aren’t having too much trouble finding their next job—at least for now.  

“People are moving fast. They’re not sitting unemployed for long,” says Aaron Miller, head of partnerships at inTulsa Talent, an organization focused on recruiting and retaining talent in Tulsa. “Even though there are layoffs, there’s still huge skill gaps that many companies need to hire for.”

Yesterday I sat down with Miller and Megan Thomas, inTulsa’s managing director, to discuss the job market in Tulsa—a city that has been experimenting with new methods to recruit talent since even before the pandemic. The city, which has a relatively small but burgeoning startup scene, made headlines in 2018 when it launched a novel remote work program, dubbed Tulsa Remote, that would offer to pay employees $10,000 in cash to move to Oklahoma’s second largest city. Since 2019, about 70 other U.S. cities and towns have launched incentive programs. More than 1,800 people have moved to Tulsa—and 90% of those people have stayed longer than a year. inTulsa works closely with Tulsa Remote and other privately-funded economic development programs towards a similar endgame: to attract people to the city, and connect individuals who are underrepresented in the workforce with jobs.

In some regards, COVID has made cities like Tulsa more appealing to the average tech employee. For instance, lower tax rates and a relatively cheaper standard of living have put cities like Tulsa on the map (“You’re not eating ramen in a one bedroom apartment to do your startup and take a risk,” Thomas says). At the same time, remote work has posed its own challenges for the pre-existing business landscape. As more employers become sympathetic to the work-from-home model, local companies are now competing with San Francisco or New York-based salaries, too. Most Tulsa-based startups can’t compete at the compensation level, according to Thomas.

“That’s probably where I’ve heard the most fear about the future: How [we are] going to compete now that people can work from anywhere,” Thomas says.

The venture capital-funded surge of 2020 and 2021 lured tech companies into scaling as quickly as possible, and recruiting sales teams and developers at a fast clip. 

Miller and Thomas say that speed is paramount and can help employees make decisions faster. “If a company is slow, and they have 17 interviews before they get an offer—they’re just not even in the running,” Thomas says.

In 2022, flexible working arrangements are also compelling. And so are apprenticeship or training programs. Some employers are electing to help coach staffers to give them the skills they are looking for in a position, rather than hire employers who already have the experience. This can play out in boot camps, online third-party courses, or in-person training. It broadens the talent pool, Miller says, and can also help bring more diverse talent into the mix.

“I think that startups used to say: We don’t have time for that,” Miller says, but it’s increasingly become a necessity to scale at a fast clip.

Top of mind across urban areas within red states is how new abortion legislation will impact the talent pipeline. Oklahoma was one of the first states to pass legislation banning abortions when the Supreme Court overturned Roe v. Wade earlier this year. While many conservatives have celebrated the move, others are questioning the impact it will play on innovation and the talent shortage in Oklahoma City and Tulsa.     

“We lost someone because of it,” Michael Basch, managing partner of the Tulsa-based early-stage venture capital firm Atento Capital, said when I asked about this during a dinner his fund hosted last night, noting that it comes up “a lot” in discussions about whether founders or prospective fund employees will want to move to Tulsa. 

See you tomorrow,

Jessica Mathews
Twitter: @jessicakmathews
Email: jessica.mathews@fortune.com
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Jackson Fordyce curated the deals section of today’s newsletter.

VENTURE DEALS

- TigerEye, a San Francisco-based sales software company, raised $30 million in Series A funding co-led by Initialized Capital and Next47.

- Diveplane, a Raleigh, N.C.-based A.I.-powered business solution for government and business organizations, raised $25 million in Series A funding. Shield Capital led the round and was joined by investors including Calibrate Ventures, L3Harris Technologies, and Sigma Defense. 

- Joonko, a New York and Tel Aviv-based automated sourcing platform, raised $25 million in Series B funding. Insight Partners led the round and was joined by investors including Target Global, Kapor Capital, and Vertex Ventures Israel. 

- Aqua-Yield, a Sandy, Utah-based nanoliquid company for agricultural production, raised $23 million in Series A funding. Larry H. Miller Company led the round and was joined by investors including Penny Newman Grain Company and San Leonardo. 

- Cledara, a Denver-based software management platform for growing companies, raised $20 million in Series A funding. CommerzVentures and By Miles co-led the round and were joined by investors including Carbide Ventures, Massive, Nauta Capital, and Notion Capital.

- Modulous, a Seattle and London-based construction technology company, raised $11.5 million in Series A funding. SFV, Regal London, CEMEX Ventures, Blackhorn Ventures, GroundBreak Ventures, Goldacre, and Leela Capital invested in the round. 

- Opus Security, a Tel Aviv-based cloud security orchestration and remediation startup, raised $10 million in seed funding. YL Ventures led the round and was joined by investors including Tiger Global and other angels. 

- Rootine, a Nashville-based health and nutrition company, raised $10 million in Series A funding. Relevance Ventures led the round and was joined by investors including Techstars and DSM Venturing.​​

- HealthMatch, a Sydney-based patient recruitment platform for clinical trials, raised AU$10 million ($6.88 million) in Series C funding. Folklore Ventures led the round and was joined by investors including Square Peg Capital and others. 

- Mailchain, a London-based Web3 email platform, raised $4.6 million in seed funding co-led by Crane Venture Partners and Kenetic Capital. 

- t2, a London-based decentralized publishing platform, raised $3.4 million in seed funding, Inflection and Archetype led the round and were joined by investors including Metaweb, SevenX Ventures, Seed Club Ventures, Block0, GCR, Generalist Capital, and Marc Weinstein.

- GrowerIQ, a Toronto-based cannabis enterprise resource planning platform, raised $3 million in seed funding. Golden Section and MaRS IAF led the round and were joined by investors including LAGO, Delbridge, GTM Fund, and Gaingels.

- Peer Robotics, a New Haven, Conn.-based mobile robotics company, raised $2.3 million in seed funding. Kalaari Capital led the round and was joined by investors including Axilor Ventures, Connecticut Innovations, and Innopact VC.

PRIVATE EQUITY

- Tercera acquired a minority stake in Black Diamond Advisory, a Golden, Colo.-based advisory firm, for $25 million. 

- Acuity Knowledge Partners, backed by Equistone, acquired Cians Analytics, a New York-based research and analytics provider for financial institutions. Financial terms were not disclosed. 

- Igneo Infrastructure Partners agreed to acquire US Signal Company, a Grand Rapids, Mich.-based data center and network solutions provider. Financial terms were not disclosed.

EXITS

- Newfold Digital, backed by Clearlake Capital, agreed to acquire MarkMonitor, a San Francisco-based domain management solutions provider, from Clarivate for approximately $302.5 million. 

OTHER

- Alphabet invested $100 million across venture capital firms including Black Tech Nation Ventures, Collide Capital, Concrete Rose, Heirloom Capital Partners, Serena Ventures, Share Ventures, and Zeal Capital Partners.

- Repeats acquired Polimero, a Rovigo, Italy-based recycled low-density polyethylene producer. Financial terms were not disclosed. 

- Roland Corporation agreed to acquire Drum Workshop, an Oxnard, Calif.-based drums, pedals, hardware, and accessories designer and manufacturer. Financial terms were not disclosed.

IPOS 

- Alghanim Industries, a Kuwait City-based conglomerate, plans to raise about $1 billion in a potential initial public offering, according to Bloomberg. 

FUNDS + FUNDS OF FUNDS

- EQT, a Stockholm-based private equity firm, raised €2.2 billion ($2.23 billion) for a fund focused on technology companies in Europe and Israel. 

PEOPLE

- Altas Partners, a New York and Toronto-based private equity firm, hired Paul Emery and Michael Korzinstone as partners. Formerly, Emery was with Hellman & Friedman and Korzinstone was with Cinven. 

- Enlightenment Capital, a Chevy Chase, Md.-based investment firm, hired Rob Harper and Michael Roualet as vice presidents to the firm’s investment team. Formerly, Harper was with AE Industrial Partners and Roualet was with Robert W. Baird. 

- H.I.G. Growth, a Miami-based alternative assets investment firm, hired Patrick Conroy and Hans Sherman as managing directors, Albert Koh and Andy Lefkarites as principals, and promoted Eric Yee to principal. Formerly, Conroy was with Revolution Growth, Sherman was with Bain Capital Tech Opportunities, and Koh and Lefkarites were with Owl Rock. 

- Stellex Capital Management, a New York-based private equity firm, hired Mark Redman as a managing partner. Formerly, he was with abrdn. 

- Thomvest Ventures, a San Francisco-based venture capital firm, hired Dave Hafford as senior associate. Formerly, he was with Morpheus Ventures. 

- Upfront Ventures, a Santa Monica, Calif.-based venture capital firm, hired Nick Kim as partner. Formerly, he was with Crosscut.