Austin’s billion dollar club
Austin’s billion dollar club
A look at the Central Texas-based companies that have surged past the $1 billion mark in value.
With Austin’s rapid growth, it’s not always easy keeping up with which are the biggest Austin-based businesses these days.
To give a clearer picture of the industry giants that use Austin as their home base, we decided to compile a list of the $1 billion companies that are headquartered in the Austin metro area.
We limited the list to companies that have their formal headquarters in Central Texas or run the majority of their operations from the Austin metro area, such as is the case with Advanced Micro Devices. A number of multi-billion-dollar companies have significant Austin operations — including Apple, IBM, Samsung, Amazon, Oracle, NXP Semiconductors and a host of others — but those aren’t headquartered here, so they aren’t on the list.
Public companies that were included on the list had at least $1 billion in market capital — the collective value of all of the company’s shares — or at least $1 billion in annual revenue.
Private companies with a valuation of at least $1 billion — verified either through revenue, a purchase agreement or similar evidence — also made the list.
Compiling — and verifying — such a list comes with its challenges. While values for publicly traded companies can be readily verified through corporate documents and securities filings, establishing values for privately held companies is more of a challenge. In some cases, we have relied on information provided by the companies themselves, or info that was made public as part of an acquisition. In other cases, we are relying on estimates from reliable sources.
More important is answering the question: What story are we trying to tell by collecting a list of Austin’s billion-dollar companies?
One answer is that the number of billion-dollar companies in Austin helps show that the city is a viable destination for sustaining a business, said Brian Kelsey, research director for the Capital of Texas Media Foundation, a local nonprofit that publishes reports regarding local civic and social issues.
“We’re a far cry from the days when people could name Dell, Whole Foods, and maybe one or two others before getting into a debate about whether or not companies could scale effectively in Austin without getting acquired and uprooting to the coasts,” Kelsey said.
Kelsey said Austin differs from larger markets like Dallas and Houston, because major companies in these cities have more competition for the talent pool.
“Big companies can more easily stand out from the crowd and potentially offer workers more stability than the startup experience,” Kelsey said. “As Austin continues to grow and evolve, that calculation will change, but few places can rival Austin’s mix right now of entrepreneurial and big-company opportunities.”
The presence of billion-dollar companies can also contribute to the growth of startups in the metro area, said Jake Moilanen, Austin general partner for California-based venture capital firm Seraph Group.
“Having more successful companies means that these larger corporations can pay their executives more money, and that means those executives have more money to invest, which could open up more opportunities for innovations to occur,” Moilanen said.
Before we get to the list, a few caveats: It’s possible there are companies who aren’t represented here that should be on the list. That means we weren’t able to verify the company’s valuation or annual revenue. We certainly are willing to update the list going forward when we can confirm those numbers from reliable sources.
With that said, here’s a look at Austin’s billion-dollar companies:
Publicly traded companies
$90.6 billion revenue in fiscal 2019, $39.5 billion market cap
There might not be a bigger local success story than Dell Technologies. Famously born in 1984 in the University of Texas’ dorm room of founder Michael Dell, the Round Rock-based company has grown into one of the world’s largest technologies companies, now with more than $78 billion in annual revenue and more than 13,000 employees in Central Texas.
The company has had its share of twists and turns in the past decade, as it has bounced back and forth between being publicly traded and privately held, and has made some of the biggest acquisitions in its history, including the $67 billion deal for data storage giant EMC Corp. Dell also gained a controlling stake in VMware as part of the EMC deal, which has played a large role in the company’s more recent foray into data center and cloud server products.
At the company’s tech summit in Austin last year, Michael Dell said he wants the company to lead in services and technologies that help people make sense of what he described as a “tsunami of data.”
“Now, just putting this technology in the hands of people is not enough; the greatest opportunity is to really put this data to work to help the most people,” he said.
Advanced Micro Devices
$69 billion market cap, $6.7 billion revenue in 2019
Advanced Micro Devices, or AMD, is formally headquartered in California, but most of its operations and executives are based in Austin.
AMD, which has about 1,500 employees in Austin, is considered a rival to tech giant Intel in the computer processor market.
Under the leadership of Lisa Su, who was named CEO in 2014, AMD has mounted a comeback story, and has seen its stock price climb from below $2 a share about three years ago to above $50 per share today.
$7.05 billion market cap, $1.96 billion revenue in 2019
Parsley Energy was founded in 2008 and operates hundreds of oil and natural gas wells in the Permian Basin in West Texas. Matt Gallagher, president and CEO of Parsley Energy, started his role in 2019 after founder Bryan Sheffield, who remains chairman of the company’s board of directors, stepped down. The company, which employs more than 450 people, leased out a 31-story tower in downtown Austin in 2018.
American Campus Communities
$6.57 billion market cap
American Campus Communities is one of the country’s largest student housing developers. The company said it owned 168 properties and managed an additional 205 as of September 2019. The Castilian and the Block are among the developer’s Austin portfolio. The company announced last year that it is in the early stages of a student housing development in partnership with Texas State University.
$5.87 billion market cap, $1.35 billion revenue in 2019
National Instruments is one of the city’s oldest tech companies, and specializes in developing hardware and software for research. Founded in 1976, National Instruments has about 8,000 employees worldwide, with about 2,700 of those in Austin.
$5.74 billion market cap
SolarWinds was founded in 1999 and became a publicly traded company in 2009. The company sells software for IT management and monitoring, and more than 500 of its roughly 1,850 employees work in Austin. The company took a break from the public markets in 2015 after being sold in a $4.5 billion deal to Silver Lake Partners and San Francisco-based private equity firm Thoma Bravo. SolarWinds returned to the public markets with a $375 million IPO in October 2018.
$4.61 billion market cap
Silicon Labs is a semiconductor company known for its Internet-of-Things products. The Internet of Things is a tech industry term for non-computing devices that are connected to the Internet. Founded in 1996, Silicon Labs has about 700 of its 1,500 employees in Austin.
$4.75 billion in market cap, $1.2 billion revenue in 2019
Cirrus Logic designs chips for audio and voice technology as well as other signal-processing applications used in smartphones and sound engineering equipment. The company has about 800 employees in Austin.
$1.26 billion market cap, $4.83 billion revenue in 2018
Resideo, a spinoff from North Carolina-based manufacturing conglomerate Honeywell, announced Austin as its headquarters in October 2018. Resideo sells IoT home devices, including products for temperature control, water leak detection, cameras, air cleaning and water heaters.
$4.26 billion market cap
Q2 Holdings is an Austin software company that sells digital banking software and services to community-focused financial institutions. The company was founded in 2005, and became publicly traded in March 2014 with a $101 million IPO. Last year in October, the company acquired North Carolina-based financial tech company PrecisionLender in a deal valued at more than $500 million.
$2.8 billion market cap
Yeti, a maker of high-end outdoor and recreational products, began trading on the New York Stock Exchange in October 2018 with a $288 million initial public offering.The company has said its recent growth was driven by direct-to-consumer sales and marketing strategy, which included its merchandising and website.
$2.3 billion market cap
SailPoint is an Austin-based cybersecurity firm that specializes in identity and access management software. It has about 500 employees based in Austin. The company, founded in 2005, went public in 2017 and serves more than 1,000 customers around the world, including Humana and PricewaterhouseCoopers, according to its website.
USA Compression Partners
Market cap $1.52
USA Compression Partners was founded in 1998 and is one of the largest gas-compression service providers in the nation. The company’s equipment is used in key gas production areas, including the Eagle Ford and Barnett shale fields in Texas. The company completed a $1.8 billion acquisition of Dallas-based Energy Transfer Partners in April 2018.
$1.06 billion market cap
Luminex was founded in 1995 and develops biological testing systems that allow a tiny sample of blood to be tested for dozens of biological markers. It can be used for gene-based research and diagnostics. The company had about 900 full-time and contract employees in 2017. The company, which became publicly traded in 2000, has made several acquisitions in the past several years, including a $75 million deal to buy Massachusetts-based MilliporeSigma last year.
$1.01 billion market cap
Forestar Group, a residential development company, became a subsidiary of Fort Worth-based D.R. Horton through a $560 million majority acquisition in 2017. The company has operations in 51 markets in 20 different states according to its website.
$1.11 billion market cap
Founded in 2013, Upland Software offers web-based cloud services designed to manage a variety of internal operations, including project management, human resources and customer relationship management. Upland Software was founded in 2005 and specializes in “customer revenue optimization,” which involves using augmented and artificial intelligence technology to enhance sales strategies.
National Western Life
$1 billion market cap
National Western Life is a life insurance company that was founded in 1956, according to its website. The company said it has 284 employees, along with 27,000 contracted agents, brokers and consultants, and managed a total of $12.6 billion in assets as of October 2019.
Revenue $1.05B in 2018
Hanger develops orthotics and prosthetics and cares for patients through a network of more than 800 clinics nationwide. According to the company’s website, the company was started in 1861 by founder James Edward Hanger, who the company claims was the first amputee of the American Civil War. It moved its headquarters to Austin in August 2010, and has more than 4,900 employees worldwide.
Valuation of $13 billion to $16 billion
Whole Foods is one of Austin’s best-known homegrown success stories. Born in 1978 as a single store on Lamar Boulevard, Whole Foods became an iconic Austin business, growing to more than 400 stores while changing the way the nation thinks of food and shopping for groceries.
The company was acquired by Amazon in 2017 for $13.7 billion, but continues to operate as a wholly-owned subsidiary. Since the acquisition, Amazon doesn’t report Whole Foods’ annual revenue, but for the year preceding the deal, the company reported full-year revenue of just over $16 billion.
$3 billion valuation
Bumble operates a mobile dating app that allows women to initiate the conversation. The company, which was launched in 2014, has about 80 million users worldwide. Bumble earned its $3 billion valuation when New York-based private equity firm, the Blackstone Group, purchased a majority stake in MagicLab, which was Bumble’s parent company at the time.
Tito’s Handmade Vodka
$2.5 billion valuation
Austin-based spirit maker Tito’s Handmade Vodka first reached billion-dollar status in 2017 when Forbes reported that the company was worth $2.5 billion. IWSR, an industry market analysis firm for the spirits, wine and beer industry, recently reported that Tito’s Handmade Vodka has surpassed Smirnoff vodka as the top-selling distilled spirit in the United States.
$1.9 billion valuation
RigUp reached a $1.9 billion valuation in October after landing a $300 investment from Andreessen Horowitz, according to the Wall Street Journal. The deal is considered one of the largest in Austin’s history. The company, which was founded in 2014, created an online platform to connect oil and gas companies with service companies, and provides services for bidding, pricing and meeting regulatory requirements.
Kendra Scott Design
$1 billion valuation
Reuters reported in December 2016 that private equity firm Berkshire Partners had made a significant investment into Austin-based jewelry design company Kendra Scott Design. The company earned a $1 billion valuation through the Berkshire deal, and is one of the largest woman-owned companies in Austin. As of last year, Forbes magazine estimated founder Kendra Scott’s net worth at $550 million.
Estimated annual revenue of $1 billion
Technology company HID Global specializes in identity authentication and security. The company has estimated annual revenue of about $1 billion, according to CrunchBase, an online database of tech companies operated by technology website Tech Crunch. HID Global is a subsidiary of Assa Abloy, a Swedish supplier and manufacturer of locks.
Valuation of $1 billion-plus
Founded in Austin in 2004, online job search company Indeed was acquired by Japan-based HR services company Recruit Co. Ltd. in 2012 for a reported $1 billion. Privately held Indeed continues operate as a wholly-owned subsidiary, and continues to be based in Austin, where it has more than 2,500 employees
Another likely club member
For some Austin-based companies, it’s more difficult to put concrete numbers to their valuations. That’s especially true with private equity firms and financial services firms that primarily focus on wealth management. Those companies are typically privately held, and it can be harder to get an accurate projection of exactly what their value might be.
But with at least one of those, we’re willing to make an educated guess, based on what’s publicly known about the firm:
Vista Equity Partners
Founded in 2000, private equity firm Visit Equity Partners is led by by billionaire Robert F. Smith. Forbes magazine estimates Smith’s net worth at $5 billion, and ranks him as the world’s wealthiest African-American billionaire. Vista Equity’s capital commitments — meaning, the funding investors have agreed to contribute to one of the firm’s funds — are over $52 billion, according to the company’s website. The firm doesn’t make public any other financial data, but that alone likely cements Visit Equity’s status on the billion-dollar list. Plus, a look at the portfolio of companies the firm has acquired pretty much removes all doubt. That portfolio currently features 63 companies, according to Vista Equity’s website, and you don’t have to look far to reach well into the billions on valuation. The list includes London-based technology company Finastra, which was formed by combining two other companies Vista acquired, Misys and D+H. Finastra had revenue of $2.1 billion in 2018, and Bloomberg News reported last year that Vista Equity was considering selling half its stake in the company for $10 billion. And then there’s Tibco Software, which Vista bought in 2014 for $4 billion, and Solera Holdings, which was acquired in 2015 for $3.7 billion. You get the idea; Vista Equity is safely in Austin’s billion-dollar valuation club.
To be sure, there are some other privately held companies headquartered in Austin that could be members of the billion-dollar club — but we weren’t able to confidently confirm those valuations. We’ll update this list if and when we’re able to confirm that data going forward.
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