Lexington is better known for horses and bourbon than high-tech entrepreneurs. But there are more of them than you might think, and they make everything from hardware for the International Space Station to designer mice.
Exstream Software, the document management company founded by Davis Marksbury and Dan Kloiber in 1998 and bought a decade later by Hewlett Packard, may be the most famous example of home-grown tech success. It was valued at more than $900 million at the time of its sale.
Annual surveys of local technology companies over the past four years have shown steady growth in jobs and salaries, said Warren Nash, executive director of the University of Kentucky’s Von Allmen Center for Entrepreneurship.
In 2013, 248 full-time and part-time jobs were created, with another 272 added in 2014 and another 280 in 2015. This year’s survey is expected to show nearly 300 more jobs created, Nash said. Over that period, the average annual salary of those jobs has risen from $65,000 to $77,000.
Sign Up and Save
Get six months of free digital access to the Lexington Herald-Leader
Most of these companies are not large or well-known, but they do fascinating things. For example:
Space Tango on Monday had its TangoLab-1 installed on the International Space Station. It will rent space in the automated lab to companies wanting to do micro-gravity research. NASA also just awarded Space Tango a contract to work with Jeff Bezos’ Blue Origin to modify the lab for use on its New Shepard, one of the new-generation reusable space launch systems.
Medmovie has taken the field of medical illustration into animation media, primarily for use in training physicians.
MakeTime has created an online marketplace to match companies that need things manufactured with others that have surplus manufacturing capacity.
Fluent calls itself a financial network for global commerce, with technology platforms for everything from supply chain management to accounts receivable.
Among the most interesting bio-tech companies is Transposagen, which uses gene-editing technology to create specialized lab rodents for scientific research. It has more than 300 clients, including all of the 15 major pharmaceutical companies. Transposagen spun off another company, Hera BioLabs, a contract research organization.
Main Street has two tech company incubators. One of them, Awesome Inc., said Tuesday that it has accepted five new start-ups into its “fellowship” program, which since 2013 has helped 14 companies create 61 high-tech jobs in Kentucky and attract more than $5 million in investment capital.
Among the new “fellows” is RalphVR, which develops virtual reality games. Last year, it won $100,000 in a global competition for game developers. That field has become a popular niche for Lexington entrepreneurs, with such companies as Super Soul and Frogdice. Gamers even have a local networking organization, RunJumpDev.
It's a long process to build an ecosystem. I think we're really starting to see some results.
Warren Nash, UK’s Von Allmen Center for Entrepreneurship
Lexington’s other tech incubator, Base 163, is owned by Randall Stevens, whose architectural software company ArchVision is celebrating its 25th year by launching a new product under a spinoff company. Stevens, 48, came to UK from Pikeville to study architecture. It was a time when computer programs were replacing drafting tables and blueprints. Rather than design buildings, he decided to design architectural software.
ArchVision’s software for creating architectural renderings is now used by about 1,500 customers in more than 100 nations. Stevens’ new content-management solution is called AVAIL, and it helps architects find in their databases the digital illustration components they use to create plans and renderings. He thinks the software could have big growth potential.
“Right now, there’s probably one guy in the corner in each of these offices that’s intimate with our products,” he said. “With AVAIL, it’s going to be every desktop. So it's a much different ballgame.”
Nash thinks Lexington will continue to see strong growth in high-tech entrepreneurship for several reasons. Critical masses of talent are developing in some niches, along with local investment capital. The Bluegrass Angels, an investment group, recently started its third investment fund since 2004. And there are several other start-up investment groups around the state, including in Louisville, Elizabethtown, Ashland, Owensboro and Northern Kentucky.
More importantly, investors outside Kentucky are now more willing to look beyond big cities for companies worth putting money into, Stevens said.
Lexington’s central location and high quality of life are assets, but a limited talent pool now limits growth.
“If you need to hire 20 engineers you can probably still do it here,” Stevens said. “If you need to, in the next six months, hire 200 engineers, you had better go to where they already are.”
That will change over time, Nash believes.
“It's a long process to build an ecosystem,” he said. “I think we're really starting to see some results.”