Austin Breaks Its Funding Record for the Third Time This Year

Welcome to Austin Founders Feed, your weekly rundown on the people, companies, events, and opportunities shaping one of the most exciting business scenes in the country.

This week, we are looking at Austin's startup funding record being broken for the third time this year: The Boring Company's $3 billion raise, a $23 billion valuation, and another sign that the scale of companies being built here is changing fast.

Let's get to it.

Ken & Warren

Austin's startup funding record apparently wasn't meant to last very long.

Elon Musk's The Boring Company raised $3 billion in a new Series D, valuing the Austin-area tunneling company at $23 billion. It's the largest startup funding round in Austin history. And remarkably, it's the third time that record has been broken this year.

This year’s progression:

Saronic's March round had already set a new Austin record at $1.75 billion and valued the autonomous-ship company at $9.25 billion. Less than six months later, The Boring Company nearly doubled the size of that raise.

The Boring Company's new round was led by the United Arab Emirates and affiliated investment entities, with participation from Sequoia Capital, Andreessen Horowitz, Human Capital, Vy Capital, Valor Equity Partners, Temasek, Shamal Holding, and Baron Capital. The company has come a long way since Musk launched it in 2017 after complaining about traffic.

Its goal is to build underground transportation networks using tunnels dug by its own boring machines. The company currently operates its best-known system in Las Vegas and is expanding into Nashville and Dubai.

The new capital will help fund a much bigger international expansion.

The Boring Company plans to develop more than 150 kilometers of underground infrastructure across the UAE, while also increasing hiring across engineering, production, and operations and expanding its Loop projects in Las Vegas, Nashville, and Dubai.

A $1 billion funding round would have looked extraordinary in Austin only a few years ago. This year, one local company hit that mark, another blew past it at $1.75 billion, and now a third has raised $3 billion.

Austin is increasingly producing companies capable of attracting some of the largest private funding rounds in the country.

Thomas Anzivino
Founder, Longitude Financial Planning

When people learn I’m a financial advisor I get a three different reactions:

My response to the first reaction is simple. 

I’m a fee-only fiduciary. The only thing that I sell is professional advice and service, never financial products that you don't need.

The second and third are directly addressed by this article's topic, building a safety net.

Before investing in the stock market, it's important to build a cash reserve to protect you from life’s shocks. 

By the same token, unexpected expenses are often what lead to debt and tax problems.

So how is a safety net built? How do you know when you're safe from life’s unexpected costs?

There are two measurements I look at to know if a safety net is complete. 

The first measurement is the Emergency Fund. It's the number of months you could cover expenses from savings if income stopped. 

A complete emergency fund for someone in their 20’s is 3 months of expenses. As we get older, and surprise bills grow and multiply, a 6 month, then 12 month emergency fund becomes the target. 

Running a business? Your business needs its own emergency fund. Without emergency funds for both your household and business, financial disruptions on one side can bleed into the other. Don't let your business sink your household or vice versa. 

The next metric that I check is the Current Ratio. This ratio is your cash (and cash-like assets) vs. debts due in the next 12 months. 

The goal is to have a ratio of 1, meaning that your cash-on-hand can cover your debt payments  due in the next 12 months. 

“Current” refers to the current assets and current liabilities on the balance sheet. The “current” operating cycle is often one year, meaning these assets are available within one year and the debt is due within one year.

A current ratio below 1 means you will have to rely on future income, asset sales, or borrowing to meet obligations. In other words, you’re accepting the risk that you won't be able to meet your obligations.

No Debt? Great, that makes the ratio very easy, and will make your safety net easier too. On the flip side, debt is a tool, learning to use debt wisely will allow you to maximize your financial outcomes. 

If you want to know if your safety net is on track, along with 5 other important metrics, fill out this form for a free report: Free Financial Health Check

Your emergency fund and current ratio results inform when your safety net is on track, protecting you from shocks and allowing you to begin to build real wealth. 

P.S. To level up your money and relationships, check out my newsletter Love & Wealth

Austin continues to outperform other major U.S. metros when it comes to population growth, housing construction, and new business formation.

The numbers:

LendingTree ranked metros across three categories: people and housing, work and earnings, and business and economy, using federal data from the Census Bureau, BLS, and BEA. The latest analysis compares 2023 with 2024.

Until next time,
Austin Founders Feed

Ken & Warren