Local startup Lucid was recently acquired for $1.1B, making the New Orleans marketing technology firm the first “unicorn” (a startup valued at over a billion dollars) in the history of Louisiana. Lucid was preceded a few weeks earlier by Levelset, which was acquired for $500M, and a number of other regional startups that had significant liquidation events in 2021. As you can see below, it us an impressive collection of entrepreneurial wins for Greater New Orleans:
You could also add to this list Swerve, a local natural sweetener company that was bought by Whole Earth Brands for $80M in late 2020. The hits seem to keep coming, and accelerating.
These exits are important to the Greater New Orleans economy for many reasons.
First, these acquisitions validate the quality of the New Orleans market to the rest of the world. As Lucid, Levelset, and the rest were headquartered in Greater New Orleans, the investment community now sees that a company does not have to leave New Orleans in order to make it big. And since several of these companies had backers in large financial markets such as Texas, California, and Hong Kong, the venture capital community on the coasts and around the world now see that funding New Orleans companies can be very profitable – which will lead them to invest more.
Second, these exits validate the “long play” that has been made by the New Orleans entrepreneurial community since Hurricane Katrina. Many of these companies were supported and funded by groups like Idea Village, Launch Pad, the New Orleans Startup Fund, and GNO, Inc. – and now we can see that sustained effort pay off, literally.
Speaking of which, these exits will re-inject massive funding back into the local economy. By our calculation, $700M or more will come into Greater New Orleans via the employees and local investors in these companies. This cash will then help spur new rounds of entrepreneurship and investment, and thus support the next wave of companies and regional wealth creation. The fly-wheel is really beginning to spin.
Finally, these acquisitions, and the existence of a “real, live unicorn,” will help inspire all of our entrepreneurs and aspiring founders. Seeing a set of diverse companies go from start-up to global acquisition will make the entrepreneurial path both clearer and seem more possible for the next cohort of dreamers.
But, of course, the question that everyone asks after an exit is: Will they stay? As of now, the answer to this question seems to be “yes” for nearly all of these firms. For example, Patrick Comer, founder and CEO of Lucid, will be the Chairman of the new, merged entity.
We cannot take this for granted, however. In order to ensure that companies continue to invest in Greater New Orleans, we have a lot of work to do. We have to make sure our tax structure is right, which is why lowering our tax rates is so important (hint: vote YES for Constitutional Amendment 2 this Saturday). We have to make sure our workforce is well-trained, which is why investing in education, from early childhood to post-secondary and beyond, is critical. We need more women and people of color as founders, which is why GNO, Inc. leads initiatives like our HBCU Startup Internship program. And, we have to make sure we have the basics right. Good infrastructure and public safety are fundamental to business and population growth.
2021 will be remembered as a landmark year for entrepreneurship in Greater New Orleans, when our intrepid founders led their companies to exit events with style and grace, and gave the region validation, inspiration, and significant new wealth creation for the future.