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Roanoke/New River Year-in-Review: 2024 was about laying groundwork

Not every year can be 2023.

That’s the verdict from economic development watchers in a wide stretch of , ranging from Lynchburg west through Roanoke and Salem to the New River Valley.

In 2023, this region experienced a burst of business announcements with a total investment of at least $387 million and expectations of thousands of new jobs. The annual report for the Roanoke Regional Partnership, a regional economic development organization was titled “The Biggest Year.”

John Hull, executive director of the partnership, thinks it’s unfair to measure last year against its predecessor, which he calls an outlier in the region’s development trends. “It’s more appropriate to compare 2024 to 2022.”

He ran through a list of large and small projects, including new locations and expansions, that landed in 2024 in the areas that the partnership represents: the counties of Alleghany, Botetourt, Franklin and Roanoke; the cities of Roanoke, Covington and Salem and the town of Vinton.

None matched the scope of 2023’s Wells Fargo expansion announcement in Roanoke County, which is projected to bring 1,100 jobs, although as of 2025, both the county and the bank declined to provide an update.

Last year did, however, have a healthy mix of activity that shows a continuing momentum, and a promise of more to come, according to Hull, who calls 2024 “a strong year for the region.”

Tommy Miller, economic development director for the City of Salem, describes last year as “a lot of progress supporting the success stories of the previous years.”

Farther southwest, Katie Boswell, executive director of Onward New River Valley, says 2024 was quieter there, with her office more focused on attracting new businesses and retaining existing ones.

For the region, the biggest project of 2024, in terms of jobs created, was one announced in December 2023. Lynchburg’s Framatome expansion, which commenced construction and hiring in 2024, aims to create a cadre of nuclear power plant technicians ready to service an expected wave of new Small Modular Reactors, or SMRs, that are proposed for locations across the country and around the globe.

Marjette Upshur, Lynchburg’s director of economic development, calls the $49.4 million expansion, which has already led to the hiring of 200 workers toward what is expected to be 515 jobs created, “transformational” for the city.

Before the expansion, the company already was the city’s largest commercial employer, Upshur says, with about 1,250 workers at two facilities in Lynchburg.

With nuclear fuel producer BWX Technologies also in and around Lynchburg, “we’re like the nuclear energy hub,” Upshur says.

Other projects announced in 2024 in the Roanoke and New River valleys include:

City of Roanoke

In January 2024, city officials announced that Amazon.com would open a last-mile delivery facility in the Roanoke Centre for Industry and Technology. By year’s end, the new 125,000-square-foot building was up and running, supporting about 300 direct and indirect jobs, according to an Amazon spokesperson.

Marc Nelson, Roanoke’s economic development director, says the project stood out in several ways. For one thing, “it puts your city on the map” to have an Amazon facility of this type, according to Nelson.

The site Amazon chose was the former location for a much-ballyhooed Deschutes brewery that the beer company ultimately decided not to build. Nelson had received a phone call from Deschutes saying the company was stepping back from its construction plans — and then within hours he got a call from Amazon officials asking if there were any Roanoke locations that might suit the company’s needs.

So far in his career, this has been the only time when one big plan was dashed and another emerged so swiftly, Nelson says.

Outside of Amazon, 2024 was partly a year of preparation, according to Nelson.

The city received $7.5 million from the state in August 2024 and added $2.5 million of its own money to make the last large site in the Centre for Industry and Technology more attractive to potential tenants. The work involves extending utilities and constructing a pad for a building that’s between 300,000 and 400,000 square feet on the 82-acre site. That project will likely take a couple years, according to Nelson.

Also in 2024, the city continued working with Retail Strategies, an Alabama community development and urban planning firm, on examining corridors connecting Roanoke to Salem and to parts of Roanoke County, with an eye toward identifying areas that seem under-used or ready for new development. The multi-year effort should conclude in 2026, according to Nelson.

Montgomery County

In May, packaging company ESS Technologies announced plans to invest $1.6 million into closing operations at facilities in Pembroke and Blacksburg and consolidating them at a 40,000-square-foot Christiansburg facility, an expansion projected to create 27 jobs.

In January, employees moved into the new facility, according to Brian Hamilton, economic development director for Montgomery County. “The project is ongoing as far as buying equipment and hiring people.”

Hamilton welcomed the expansion news during a year when the county was seeking ways to spur future growth. He notes that Montgomery County is looking for opportunities to buy land for new developments or expansions as it builds out its existing industrial areas.

Like Roanoke with its Centre for Industry and Technology, Montgomery County worked in 2024 to ready the last site in the second phase of its Falling Branch Industrial Park. The county is installing a 20-acre pad on a 35-acre lot and running utilities to it.

Construction is underway, and the $2.81 million project should be completed by June, according to a spokesperson for the county. The preparation means that a new tenant could probably be up and running six to nine months after purchasing the property, according to Hamilton. “It definitely speeds up the process.”

City of Salem

Engaging with downtown businesses was a focus in 2024 for Miller, the city’s economic development director. The effort involved improving streetscapes, refreshing connections with long-time businesses and welcoming a new business spun off from other companies that have operated for years in Salem.

The new business is Shrewd Outdoors, owned by brothers Riley and Laven Newsom, who also operate Shrewd Archery in Salem and are officers of the Salem machine shop Damon Co., which is run by their father.

Located on Main Street, Shrewd Outdoors, which opened in September 2024, combines an archery pro shop and academy, an archery range in the basement and a planned café. It currently employs three full-time and two part-time workers, and the owners have plans to hire more in 2025.

“We’re ecstatic that they put this commitment right downtown, right in their hometown,” Miller says.

Financial Services: Federal policy, tariffs create economic uncertainty

Economists around the state are still speaking positively about ‘s economy — but there’s an elephant in the room.

The University of Virginia’s Weldon Cooper Center for Public Service expects the state’s gross domestic product will increase 2.4% this year, up from 1.9% anticipated for the nation in a Moody’s forecast delivered at the end of 2024. Old Dominion University’s Bob McNab said in his annual economic forecast in January that he anticipates the state’s GDP to increase by more than 2.5% this year.

Inflation will remain about the same in 2025, Federal Reserve staff predicted in December 2024, and in January, Richmond Fed President and CEO Tom Barkin said the U.S. economy was “in a good place.” Defense spending could grow too, boosting Hampton Roads’ economy and certain government contractors’ bottom lines.

Maybe, but here comes the elephant.

The first weeks of President Donald Trump’s hectic, headline-making second term have thrown much into doubt for Virginians, especially those who work for the federal government or in businesses or organizations that either receive federal funding or are dependent on government agencies as their clients.

More than 140,000 federal employees live in Virginia, and most of them received an email titled “Fork in the Road” in late January sent to more than 2 million federal civilian workers, offering them a seven-month buyout package if they resigned within eight days in February.

A federal judge put an indefinite hold against that deadline, but it’s quite likely a certain percentage of federal workers will be out of their jobs either willingly or unwillingly before the end of the year, experts predict.

Some federal workers were literally locked out of their offices while Trump adviser (and billionaire owner of X, SpaceX and Tesla) Elon Musk and his Department of Government Efficiency aides took charge of the Treasury Department, the Federal Emergency Management Agency, the Department of Veterans Affairs and the Federal Aviation Administration, among other agencies. DOGE’s mission from Trump: Cut staff and government spending.

Even less predictable is the potential impact of government spending cuts on Virginia’s federal contracting sector. Large defense contractors like Northrop Grumman and General Dynamics are likely to retain and receive more major defense contracts, as experts predict Trump will expand defense spending, but these contractors will need to mind their Ps and Qs. In February, Bloomberg reported that a Booz Allen Hamilton subcontractor warned the Treasury about allowing DOGE access to its payment system. That subcontractor was subsequently fired.

Govcon businesses in other sectors, such as education and foreign aid, may suffer financially as the White House targets spending in those areas. So could women- and minority-owned contracting firms if set-aside contracts end.

Meanwhile, Trump announced large tariffs on products from Mexico, Canada and China, although Canadian and Mexican heads of state worked out 30-day delays in February by promising to increase border security at their ends. Trump still went ahead with a 25% tariff on steel and aluminum imports in February, and there could be more increases soon, with the likelihood of other countries enacting retaliatory tariffs. Already China has upped tariffs on some U.S. products in response to Trump’s 10% increase on Chinese imports.

That uncertainty over long-term trade wars, McNab said in his state forecast, is driving anticipation of higher inflation in bond markets. Granted, if Trump’s tariff increases are avoided or only stay in place for short periods of time, Virginia will likely be fine economically, state economists say. The Port of Virginia so far has seen minimal impact from tariffs, although “with China, it remains to be seen,” spokesman Joe Harris noted in February.

Barkin said in February that he needed more information to see how tariffs and other policies could affect the nation’s economy and inflation, and Fed Chair Jerome Powell said in mid-February that he isn’t in a hurry to resume cutting interest rates, no matter what Trump says.

And that may be how it is for Virginia’s economy in this first year of Trump 2.0 — waiting to see what happens.

StartVA: Va. tech startups lead in fundraising

Before his company opened its Series B funding round last year, Elad Schaffer, co-founder and CEO of Faye, heard from a large venture capital fund. Could he meet with them the next day in San Francisco?

It was a 14-hour flight for Schaffer, who lives in Tel Aviv, Israel, but splits his time between there and the United States. Though the Richmond-based insurance startup already had interest from several investors, Schaffer decided to make the trip, “regardless of what that meant to my jet lag,” he says.

The investor ultimately decided to pass on Faye’s latest round, but Schaffer has no regrets.

“We felt we had to exhaust all the conversations and give everyone a fair shot, which is oftentimes, I think, the challenge with these processes,” Schaffer says. “You want to make sure that you know as much as you’re putting in the time, the serious investors, they put in the time as well.”

Faye, which has produced an app to help people purchase travel insurance quickly and easily, announced in July 2024 that it had raised $31 million in its Series B round — a time when proven companies raise capital to develop market shares beyond its initial development stage.

Led by Toronto-based Portage with participation from four additional funds, including three that had previously invested in the startup, the company plans to release more products and grow to about

80 employees, up from about 50. These include roles in operations, claims, human resources and customer experience. Schaffer says Faye also plans to find a new home office in the city to help contain that growth. “We’re ramping up.”

Venture capital investment in companies reached $1.8 billion in 2024, according to data from PitchBook and the National Venture Capital Association.

That’s down from about $2.5 billion during 2023, which mirrors national trends, says Joe Benevento, president and CEO of the Virginia Innovation Partnership Corp., a state-run nonprofit overseeing commercialization and funding of startups.

Nationally, venture capital has recalibrated itself from the headier days of 2021 and 2022, Benevento says, when there were more funds. Now, some of those funds have been concentrated at established companies, and there’s greater investment in artificial intelligence startups today.

“These AI companies actually require a lot of capital to build out, to scale, to continue to grow… so a lot of money has been deployed, and there’s an opportunity to deploy a lot of money there too,” he says.

In Virginia, seed and early-stage funding has grown 14% over the past year, from $626 million in 2023 to $717 million in 2024, and the state ranks No. 14 in those funding categories, according to PitchBook. Benevento notes that Virginia’s seen a boom in startups during Gov. Glenn Youngkin’s term, which started in 2022. Nearly 13,000 high-growth and high-wage businesses have launched between January 2022 and July 2024, surpassing the governor’s goal of 10,000 new startups, according to data provided to VIPC by Richmond’s Chmura Economics & Analytics.

According to Chmura’s report, 70% of new Virginia startups were still active in the first quarter of 2023. To be considered a startup, a company has to offer above-average wages for Virginia and a higher-than-average forecasted employment growth rate.

“The undercurrent, I think, is actually very, very positive. … We’ve seen that capital attraction for that seed and early stage where that innovation and entrepreneurship is thriving and capital is actually coming in, and the vast majority of that investment capital, by the way, is coming in from out of state,” Benevento says.

To that end, Virginia has been a focal point for outside investors. Startup World Cup, a global and pitch competition run by Silicon Valley-based venture capital firm Pegasus Tech Ventures, hosted an event in Virginia Beach last summer and is planning its second event in August.

Newport News-based ivWatch, a medical device and sensor company, advanced to the global competition’s final round in San Francisco to compete for a $1 million prize, placing third.

Startup Runway, a pitch competition for early-stage companies led by underrepresented founders, also visited Virginia for the first time in September 2024, with a competition in Richmond.

Inside the state, last year VIPC launched Virginia Invests, a partnership with seven venture capital funds, to invest $100 million in 100 state-based startups. That could expand further, Benevento says.

“All of those fund partners that we initially have started out the gate with here, again, that is basically building the pipeline, where they are committed to investing in Virginia-based startups through their funds. And what they bring along is their co-investor networks.”

Gaining traction

Just as AI companies have taken off in Silicon Valley, Northern Virginia’s AI-powered startups typically rake in more investment dollars.

Last spring, McLean’s Zephyr AI, which uses artificial intelligence to predict a patient’s drug response, raised $111 million in a Series A funding round from 30 investors, including pharmaceutical giant Eli Lilly and Washington, D.C.-based Revolution Growth, a venture capital firm started by AOL founder Steve Case that funds startups outside of Silicon Valley.

Other notably large funding rounds from 2024 include Arlington County’s Lightshift Energy, which raised $100 million from Greenbacker Capital Management, on top of a $20 million investment in 2021. Washington Harbor Group invested $60 million in Reston’s Raft, which builds data and AI solutions for the federal government.

McLean-based Defcon AI CEO and co-founder Yisroel Brumer says his company will use $44 million raised in a seed round led by San Francisco-based Bessemer Venture Partners, announced in August 2024, to focus on execution. The company delivered its first product, ARTIV, a cloud-based logistical planning and training tool that simulates real world scenarios, to the Air Force that same month.

Brumer, who co-founded Zephyr, says Defcon’s round was oversubscribed, meaning that the company was offered more money than it sought, which underscores its perceived value to investors.

“It came down to Bessemer plus a small number of investors who we consider very strategic and important,” Brumer says. Although it’s not clear yet how President Donald Trump’s second term could impact business for govcon startups, some are likely to be affected as standards change.

In week one, the Trump White House ordered the directors of the federal Office of Management and Budget and Office of Personnel Management to terminate all grants or contracts related to diversity, equity, inclusion and accessibility awarded under President Joe Biden, as far as that’s legally possible.

Trump also rescinded Biden’s executive orders directing federal agency heads to review and report on potential barriers to “full and equal participation in agency procurement and contracting opportunities.” Moving forward, green energy and climate-focused businesses will see fewer opportunities under Trump, and small business set-asides — especially those targeted toward businesses owned by women or minorities — could decline, although that would require either an act of Congress or could be challenged in federal courts.

Mark Frantz, general partner and co-founder of McLean-based Blue Delta Capital Partners, a venture firm that focuses on the federal market, predicts 2025 will continue along the same path as last year, with larger rounds driven by non-regional investors. Virginia’s venture capital ecosystem, he adds, is impacted by proximity to the federal government, which can be more “capital efficient” for companies that may get early momentum selling to federal customers, allowing them to bypass or postpone raising venture capital to grow.

“It’ll focus, again, around things like cybersecurity software,” Frantz says. “I think that leads the category for us every year.” Frantz also points out: “We’re not the Valley.”

Economic Development: Shovel-ready sites bring bigger projects to Va.

Site-readiness spending — a priority for Gov. Glenn Youngkin since he took office in 2022 — seemed to truly bear fruit in 2024, especially in Central and Southern .

In Chesterfield County alone, Super Radiator Coils announced plans last year to expand its facility, creating 160 jobs, and Danish electrolyzer manufacturer Topsoe said it will build a $400 million manufacturing plant, creating approximately 150 jobs. And at the end of the year, Youngkin announced that the world’s first grid-scale commercial fusion plant is set to be built in Chesterfield’s James River Industrial Center, a nearly $3 billion project from Massachusetts-based Commonwealth Fusion Systems, a fusion energy MIT spinoff.

In Pittsylvania County, lithium-ion battery separator manufacturer Microporous is planning to invest $1.3 billion to build a plant at the Southern Virginia Megasite at Berry Hill, creating more than 2,000 jobs.

Also, Virginia regained its crown as CNBC’s Top State for Business in July 2024 for a record-breaking sixth time and the first time under Youngkin.

As usual, the commonwealth was lauded for its educational prowess, ranking first in the nation, but CNBC also called special attention to Virginia’s infrastructure, which “really shines in the wealth of shovel-ready sites the state offers for companies that want to build fast.” Assisted by expanded site readiness funding initiatives spearheaded by Youngkin, the Virginia Economic Development Partnership and local economic development officials have brought “dozens of sites” up to speed, “promising that all utilities and infrastructure can be in place within 18 months,” the network noted.

This isn’t to say that the Republican Youngkin gets everything he wants. In early 2024, his pet economic development project, a $2 billion arena in Alexandria for Washington, D.C.’s NHL and NBA teams, failed in the Virginia State Senate, vanquished by the “blue wall” personified by Democratic Sen. Louise Lucas, chairman of the powerful Senate Finance and Appropriations Committee. For 2025, Youngkin’s last year in office as a term-limited governor, the situation has been the same — narrow Democratic majorities in both houses, too small to override his vetoes.

It’s unclear yet what Youngkin’s legacy will be, as well as whatever lies ahead for him in political life. But it’s plain as day that the state’s friendliness toward economic development has grown during his tenure, thanks in part to increased spending for site development, as well as previous administrations’ focus on workforce training and education offered through VEDP and the state’s higher education system, particularly the Virginia Community College System.

One notable area for improvement, at least according to economic development directors, would be to increase the state’s marketing budget for economic development initiatives. At the December 2024 Virginia Economic Summit and Forum on International Trade, Jennifer Wakefield, executive director for the Greater Richmond Partnership, pointed to Ohio and Michigan, states that have spent millions advertising their opportunities to prospects.

JobsOhio, a private company that promotes the state’s economic development opportunities and receives state liquor revenue under a contract, spent about $50 million on billboards in big cities on both coasts to draw people and investors to Ohio. Michigan allocated $20 million in 2023 for a national marketing campaign to boost the state’s population and economy.

VEDP President and CEO Jason El Koubi, speaking at the same event, echoed Wakefield’s points.

Virginia’s achieved momentum in getting sites prepped for businesses to move in, El Koubi added, so now is the time to spend more on marketing.

“We’ve got to solidify our position as America’s top state for talent and begin to communicate that to the rest of the world. We hear over and over again that Virginia is a great business location, but that we are a quiet state. They’re not hearing from us. We’re not showing up in the media, in the advertising, in the LinkedIn feeds,” he said.

“Virginia spends a fraction of what other states are spending on marketing for Virginia as a business location. We have got to close this gap and make this a greater priority in the state budget.”