Three months later Shift says it plans to spend $20 million to set up an engineering hub in Northern Virginia. The company has 25 local hires planned for 2016 and another 75 next year, most of whom are to be engineers working on product development. As an inducement, Shift could get up to $100,000 in state funding through the Virginia Jobs Investment Program for employee training.
“Hopefully we’ll be building a bridge between Silicon Valley and Northern Virginia,” said Shift chief executive George Arison.
Shift has created an app-based business to manage used car sales, designed to facilitate easy deals among users. It makes money by taking a fee when the car’s selling price goes above an agreed-upon minimum.
“I think the fact that a sitting governor came to their office and made a pitch made a big difference,” McAuliffe said in an interview. “They’d never had governor in their office before.”
McAuliffe has made it one of his missions to help diversify the Northern Virginia economy, and wean it off its heavy reliance on government contracting.
One way he has done that is through out-of-state trade missions. His September West Coast tour was followed by a high-profile trip to Cuba just a few weeks ago, where he touted his state’s business climate. He says he met Tuesday with a group of executives from Alibaba, a Chinese competitor to Amazon.
The economy across Virginia as a whole has been stagnant. But Northern Virginia has been adding technology jobs at a steady clip over the past year, as federal spending has become flowing again.
If and when federal budget cuts hit the region again, McAuliffe says, the state will need an alternative.
“In two years [America’s] percent of debt to GDP will be much higher,” the Governor said. “We’re going to be facing the full force and gale winds of sequestration. Again.”
Numerous technology firms have expanded operations in Northern Virginia, and not all of them are selling to the government. Vricon, a McLean-based venture of Swedish auto company Saab, told the Fairfax County Economic Development Authority it hired 42 people in Tysons Corner during the last quarter of 2015. Kaiser Permanente and Carfax reported adding 250 and 120 jobs respectively over the same time period in Northern Virginia.
Shift CEO Arison lived in the D.C.-area for 10 years before moving out West, but he says Silicon Valley’s trove of venture capital leaves it unrivaled as a start-up hub. Arison founded the company in California in 2014 with a few colleagues from Google, where he worked as a product manager. The company’s most recent fund-raise was a $50 million round led by Goldman Sachs.
“If you really want to start an amazing company you have to do it in Silicon Valley because all the investors are there,” he said.
McAuliffe said he is not done wooing the company.
“Now that this is done it’s time to get the entire headquarters to move out from San Francisco,” he said.