What’s one measure of how high Utah’s business prospects have risen in the eyes of global investors?
Two phone calls.
That’s all it took for new Utah Jazz owner and Qualtrics co-founder Ryan Smith to round up financial partners to join him ahead of buying Utah’s beloved NBA franchise last October. And Smith says the enthusiasm for investing in Utah shown by his minority partners — Australian tech entrepreneur and Atlassian co-founder Mike Cannon-Brookes, and Silicon Valley venture capital guru and Accel general partner Ryan Sweeney — is evidence of how highly regarded the Beehive State has become in the world of business and investment.
“That is what happens as a benefit of all the work that’s been done here in Utah,” Smith said. “Success breeds success. I made two calls ... and we walked into the NBA and said we’re ready to go.”
Smith’s comments came during a prerecorded question-and-answer session he did with Utah Gov. Spencer Cox that was featured in a Utah presentation Wednesday at SelectUSA, a global conference that brings the heavy hitters of the international business and investment community together with U.S. businesses and investors.
Utah government and private sector leaders are bringing their full-court press to the event, which has also included appearances by President Joe Biden and U.S. Secretary of State Antony Blinken.
Cox noted that 20 years ago the investors willing to take a chance on a Utah business were few and far between, but those are circumstances “we’ve seen change dramatically over the past decade.”
An environment once notable for its cricket soundtrack has become a hectic queue of activity as foreign investors are, according to Ben Hart, Utah Governor’s Office of Economic Development deputy director, clamoring for a presence in Utah’s high-flying economy and startup community.
“Without question, we’ve got more interest from international businesses right now than we’ve probably ever had in the state of Utah. We’re making our presence known on the international stage.” — Ben Hart, Deputy Director, Utah Governors Office of Economic Development
“Without question, we’ve got more interest from international businesses right now than we’ve probably ever had in the state of Utah,” Hart said. “We’re making our presence known on the international stage.”
Hart said Utah took a huge step in building its global recognition and reputation after hosting the highly successful 2002 Winter Olympics, the first worldwide event that followed the 9/11 terrorism attacks. He also noted the state gets an outsized volume of attention, and visits, by international leaders and dignitaries thanks to the presence of the world headquarters of The Church of Jesus Christ of Latter-day Saints.
And, Hart said more investors are learning that investments made in Utah companies are simply outperforming those made elsewhere.
“One of the things that’s played an important role is the deals in Utah are viewed as really sound, solid investments,” Hart said. “Over the years, Utah deals are worth more and the businesses are sounder than their counterparts around the country.”
One recent foreign investment in a Utah firm is turning out to be very sound, indeed.
In November 2018, Smith was just three days away from taking Qualtrics public when European software giant SAP proposed a deal that couldn’t be refused. SAP offered $8 billion cash for the Provo-based customer experience innovator, far exceeding pre-IPO market value estimates at the time. Spring forward to January of this year, which saw Smith, now in the role of Qualtrics executive chairman, ringing the Nasdaq bell with CEO Zig Serafin. Hours later, the company had vaulted to a $27 billion market value after Qualtrics stock jumped more than 40% in early trading.
Hart said the Qualtrics deal was huge (and, at that point, the highest priced acquisition deal targeting a privately held software company) and continues to have wide, positive impacts on Utah’s business sector.
“SAP’s acquisition of Qualtrics is extremely important for a number of reasons,” Hart said. “Not only did it send the right signal to the broader international investment community about opportunities in Utah, it also pushed a level of money into our economy that is supporting a lot of other companies in the ecosystem.”
Smith said another, and bigger, generation of hungry Utah startups are on the rise, including some projects launched by former employees of Smith’s that he said have gone on to build their own billion-dollar companies.
The governor is leading a team that is focused on bringing even more international attention, and potential investments, to these up-and-coming Utah businesses. Agencies and organizations participating in the SelectUSA gathering and presentations include the Governor’s Office of Economic Development, Economic Development Corporation of Utah, World Trade Center Utah, Utah Advanced Materials and Manufacturing Initiative, Utah biotech advocacy group BioHive and others.
Cox said Utah has an incomparable mix of factors powering its ongoing commercial successes that includes a young and highly educated workforce; one of the most diverse economies in the country; government and business communities that know how to work together; and a unique social cohesion evidenced by the lowest wealth and income gaps in the U.S. While the SAP deal earned headlines around the world, Utah has also drawn investment from numerous other international business titans in recent years including Stadler Rail (Switzerland) and Japanese multinationals Hitachi and Mitsubishi.
A report from the Global Business Alliance identified more than 500 international companies with a Utah presence and noted jobs powered by foreign direct investment in the state grew by more than 35% between 2013-2018.
David Carlebach, World Trade Center Utah vice president of International Investment, said Utah is consistently ranked one of the top states in the country for doing business, but the state’s share of international investment is less than Utah’s top economic rankings would suggest.
Carlebach said that all of “Team Utah” has worked over the past year to market Utah as an investment destination in countries across Asia, South America, Europe and the Middle East. The objective of this outreach, Carlebach said, is to enhance Utah’s global brand as a hub for all types of international capital.
According to Carlebach, these efforts are key to promoting Utah at the SelectUSA Summit. During this week, global investors are learning more about Utah through the many Utah officials and companies presenting at the global investment summit and through the many matchmaking events “Team Utah” is participating in alongside global investors.
“When it comes to telling the story of our state, we are lucky — Utah’s innovative companies, talent base and strong economic success make for easy selling points on why investors should look to Utah for investment opportunities,” Carlebach said. “Our goal at SelectUSA is to amplify Utah’s story worldwide in order to build our global network, attract investors, and connect them with Utah companies.
“In turn, we elevate Utah’s global status to build economic resilience and prosperity for Utah individuals and families across the state.”