Young Technology Firms Grow Rapidly in Downtown San Jose – Silicon Valley Business Journal • Swing Update


Downtown San Jose is home to some of Silicon Valley's fastest growing startups, attracted by its Caltrain connection, diverse equipment, and relatively low rents.

Mohit Aron, who founded Cohesity Inc.'s Data Storage Unicorn, has been a fan of San Jose since his tour nearly 10 years ago as a co-founder of Nutanix Inc.

"We searched a lot before locating Nutanix in San Jose," he recalls. "We were shown very expensive ghettos in places like Mountain View and Palo Alto."

Nutanix has moved to Technology Drive's Class A offices in San Jose for less than half the price of less attractive premises in the north. "We had the impression that San Jose was a well kept secret," Aron said.

Similarly, Aron was attracted to the city center when he needed to find new premises for his current company, Cohesity, after closing his offices in front of the University of Santa Clara.

"We were within walking distance of Caltrain to Santa Clara and we wanted to find something similar, which we found here," he told the Business Journal. "We have employees from San Francisco and other parts of the Bay Area where it would be difficult to travel here."

When Cohesity moved into two floors of Riverpark Towers in downtown San Jose a year ago, its global workforce was less than 200 people. It now has 830 employees and is spread over three additional floors accommodating up to 800 employees. The company plans to add 300 workers by the end of 2019.

"One of the reasons we like it here is that it's a home away from home, we do not want to be in a home." isolated community where nothing happens, "said Aron. "There are a lot of restaurants and bars and people walking around here."

Aron said that he was planning to stay downtown as well. "We do not want to keep moving forward again and again, being in a tower here means we can grow without having to move."

Eric Yuan, founder and CEO of Zoom Video Communications Inc., has quadrupled the downtown workforce of his $ 1 billion company since settling at 55, Almaden Blvd. almost four years ago. This was before on the Great American Boulevard in Santa Clara.

"We started with about 100 people and now we have about 400," he said. "We had a floor in a building and now we have three, and we have two floors in a building next door."

Caltrain, nearby restaurants in San Pedro Square, and inexpensive rents all played a key role in Zoom's move to downtown San Jose. But Yuan said that another factor was the development of the workforce.

"Many startups would like to open an office in San Francisco, which is a great place if you're young and single," he said. "However, when their employees start getting married and have kids, they want to come back to this area.They want a better place for their families than San Francisco.I think more businesses will open offices here because of that. "

Vinay Mahadik, CEO of start-up Securly Inc., a student safety student, agrees. His company, whose revenues grew by 900% on Inc 5000, provides software to schools looking to detect online harassment and make it safer.

"My co-founder lives in Sunnyvale and I live in the south of San Jose," he said. "We wanted a place where we could associate a company and a startup culture." We looked elsewhere in Santa Clara County, but found mostly spaces that seemed more suited to business-type businesses than startups. When we arrived in downtown San Jose, we found exactly what we wanted. "

Securly has doubled its workforce at Market Street over the past year to 30, and hopes to do so again next year.

"You can start a business in Palo Alto, but it's pretty hard to get into this area," he said. "I'm surprised that there have not been more startups settling in downtown San Jose, not at the same rate as the companies that are settling in Oakland and in San Francisco. "

In 2016, Okta Inc., a trusted identity management company, established a dual headquarters in San Jose, in addition to its headquarters in San Francisco. It employs about 120 people at the RiverPark Towers but, during the summer, it has taken a second floor to reach about 250 people in downtown San Jose.

"Having two headquarters allows our employees to work where they live without too much disrupting the lives of their families," said a business spokesman at the Business Journal. "Most of the employees we hired at the San Jose office are people we would not have had the opportunity to work with without a dedicated space near their homes and families."