Dallas City Wire

Tech innovation hub Capital Factory, "part of the center of gravity for entrepreneurs in Texas," has been pushed down and out of Dallas by COVID-19 – but it's not out, the company said in a recent announcement.

The company is retrenching, pulling back to its Austin headquarters and closing its Dallas event space, at least for now, according to Capital Factory's announcement issued Nov. 15.

"We aren't going anywhere," the announcement said.

Capital Factory Founder Josh Baer | linkedin.com/in/joshuabaer/

The announcement specifically mentioned COVID-19 as the reason for the company's retreat.

It's quite a fall for Capital Factory, which had grown in influence and as a player in the pre-COVID days, inviting entrepreneurs to become "members" rather than customers.

"Becoming a member of Capital Factory is about more than joining our co-working space – it's about becoming a part of the center of gravity for entrepreneurs in Texas," the company says on its landing page. "You'll have access to over 81,000 square feet of co-working space, 900 tech-focused events, 150+ of the top tech mentors in Texas, quarterly Founders Academy, VR Lab…and all the cold brew you could ever want."

Capital Factory has been the start-up place to be, especially in the state's technology innovation community.

Then-U.S. Defense Secretary Ash Carter, now director of the Belfer Center for Science & International Affairs at Harvard Kennedy School, spoke before a gathering at Capitol Factory's Austin location in September 2016 to announce Austin would be the third location for a DoD in-house tech startup.

The following summer, Capital Factory Founder Josh Baer issued "The Texas Startup Manifesto," which called Texas "the most promising technology investment opportunity in the United States" and promised that Capital Factory "is going to turbocharge it."

"Already the 10th largest economy in the world, there is still untapped potential and more growth in its future," the manifesto continued. "By connecting Austin, Dallas, Houston, San Antonio and the rest of the state into a Texas Startup Megatropolis we can unlock billions of dollars in capital and unleash thousands of diverse entrepreneurs."

However, Capital Factory could not predict the COVID-19 pandemic and the resulting economic recession.

"Co-working and meetups have been significantly impacted by COVID-19 and the limitations on working in offices, gathering groups of people, and travel," Wednesday's announcement said. "Until they bounce back, we're closing our Dallas event space and one of our four floors in Austin."

Capital Factory has "partnered" with the UT Dallas Venture Development Center for discounted office space that members may use "while we are in transition," the announcement said.

"Right now there is very little demand for office space due to COVID but we expect to have a new plan in place to announce to members by the time they are ready to start coming back into the office again," the announcement continued.

Capital Factory still plans to open the Center for Autonomous Robotics in Austin and will maintain its presence at The Ion in Houston next year, according to the announcement

"In Austin, we will continue to operate our event space on the 1st floor (Voltron, Devvie, Astroboy), the co-working space on the fifth floor (the Star Wars floor), and the Center for Defense Innovation on the eighth floor," the announcement said. "Only the 16th floor is closing. We are still launching the Center for Autonomous Robotics with Guinn Partners. We don't expect any other changes in Austin."