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09.16.2021

2021 Southeast Capital Landscape

Over the past three years, Build In SE and Embarc Collective have produced an annual report on investor growth trends taking place throughout the Southeast region (defined as Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, & West Virginia).

Since the report’s inception, our data-led observations have indicated that over the past three years the Southeast has steadily grown by 30% in new firm creation. There are currently over 280 identified firms that are actively investing in pre-seed to private equity—demonstrating a growth of 40 new firms since our 2020 report and 80 added firms since our inaugural 2019 report.

Within our respective startup communities, one of the most common questions we hear is, “Who are the active investors in the Southeast I should connect with?” We remain committed to providing you with a free open-source database of 280+ (and growing) firms from angel networks through private equity. We hope this landscape serves as a resource to help:

  • Startups identify local, active investors
  • Talent looking to build a career investing within the Southeast
  • Investors looking to build relationships with Southeast-based co-investors

View the Southeast Capital Landscape Here

 

TECH MIGRATION TO THE SOUTHEAST

Tech migration to the Southeast from traditional hubs like Silicon Valley and New York accelerated with remote work adoption during COVID closures. By normalizing virtual meetings between investors and startup CEOs, dollars allocated to Southeast-based startups grew, leading to both an influx of newly relocated firms and new funds raised to capture local deal flow.

In the past year, venture firms such as Founders Fund, Harlem Capital, and General Catalyst, to name a few, opened Southeast offices, along with the announcement of new, dedicated investment vehicles such as SoftBank’s $100M Miami Initiative, and another $100M Opportunity Growth Fund with an Atlanta-based partner. In future annual reports we intend to collect further data on the assets under management (AUM) of venture firms headquartered or with satellite offices in the Southeast, as the regional AUM appears to be growing year-over-year.

Beyond Twitter chatter highlighting Miami as a destination for venture capitalists, the highest density of venture funds in the Southeast exists within the states of Florida (79 venture firms across 11 cities), Georgia (57 firms), and Tennessee (41 firms).

In addition to the relocation or advent of new firms, the Southeast experienced an influx of individual tech talent moving in from cities like San Francisco, New York, Chicago, and Boston. Each transplant brings their unique experience, network, and (in some cases) investment capital that will make a long-term impact on our communities. Some examples of the micro-impact of this tech talent migration include Steve Parkis (former Zynga executive in San Francisco) who became an investor and advisor in Leasecake, Ideal Agent, and DocClocker and Ty Blachly (former Chief of Staff at Snap in Los Angeles), who joined the advisory board of Openly upon relocating to the Southeast.

 

EMERGING INDUSTRY TRENDS

The influx of new talent and the launch of new companies have contributed to a number of developing industry-specific trends in the region.

In the Southeast, fintech startups are no longer only found in Atlanta and Charlotte. Northern Virginia is home to both Streetshares, a digital banking tool provider, and Rize, a fintech-as-a-service startup that connects players across the financial services ecosystem with robust APIs, as well as notable fintech fund started by the co-founder of Capital One, QED Investors. Nashville is also home to several startups thriving in unique niches in the fintech space: Alto Solutions allows users to invest IRA funds in alternative assets, and Blueprint Title Built Technologies provides technology-enabled lending solutions for construction lenders.

Gaming has taken the Southeast by storm, perhaps partially inspired by the success of Epic Games in Cary, NC or EA Sports’ east headquarters in Orlando. Other game-builders are following suit, such as mobile fantasy sports developer Synkt Games and VR developer AEXLAB, both based in Miami. Startups that facilitate the success of the gaming industry are also booming, like Atlanta’s digital asset manager Mudstack and eSports operator Skillshot Media.

Biotech innovation is being found outside of Boston and San Francisco, too. BIO Alabama initiative is helping drive the creation and flourishment of biotech and pharma startups in the state, including at the esteemed HudsonAlpha accelerator in Huntsville. And since the beginning of 2021, life sciences companies in North Carolina have experienced over $3B in investment and created nearly 3,000 new jobs.

 

 

FOCUSING CAPITAL ON UNDERREPRESENTED FOUNDERS

2021 brought a notable shift in the VC landscape, where we began to see an increase in the allocation of funding for underrepresented founders.

Atlanta has been at the center of this shift. The city is home to several funds focused on investing in companies founded by BIPOC, including Fearless Fund ($5M fund which specifically focuses on women of color-led businesses), Collab Capital ($50M fund which focuses on Black founders), and the Zane Venture Fund ($25M fund backing diverse founders). According to TechCrunch, 41% of the 36 early-stage VC firms in Atlanta identify as having a diversity focus across investments, identify as having a diverse fund management team, or both. And this focus is having a real impact: Crunchbase data indicates that in the first half of 2021, Black-founded startups in Georgia raised $438M, versus only $25M in all of 2020.

This shift isn’t limited to Atlanta, either. Birmingham’s Bronze Valley is a non-profit, early-stage venture investment platform that supports startups created by diverse, underrepresented, and underestimated founders. Stand Together Ventures Lab in Virginia invests in startups tackling structural issues that disproportionately impact communities of color, such as criminal justice, immigration, and education inequality. In Nashville, the first Black healthcare fund in America, Jumpstart Nova, announced a $30M fund.

 

 

WOMEN INVESTORS ON THE RISE

In an added effort to diversify capital, the first SE Women Investor Directory was published in Q1 of this year as a new resource to identify, track, and connect active investors who self-identify as women and direct funds on behalf of institutional venture capital firms. At present, the directory includes 90 investors representing 70 firms across a total of 23 Southeastern cities and 10 states (including Louisiana). By the end of 2021, the SE Women Investor Directory is targeted to grow to over 100 active institutional investors.

The state with the highest number of active women investors is Georgia with 25, followed by Tennessee and Florida tied for second place with 19 institutional investors. Over half (53 of 90, or 58%) of women investors in the Southeast hold top leadership titles of Founding and/or General Partner, Managing Partner/Director, or Partner.

New women-led venture firms in the Southeast established in 2021 include TechFarms Capital (Pensacola), SteelSky Ventures (relocated to Atlanta from NYC), Collab Capital (Atlanta), and Backend Capital (expanded presence from SF to Miami).

 

SHARE THE SOUTHEAST CAPITAL LANDSCAPE

Over the years, we’ve heard many anecdotes from founders crafting their investor prospecting list and investors finding deal flow and co-investment opportunities from this resource. We hope that it serves a similar purpose for you and encourage you to share our open-source database widely.

View the Southeast Capital Landscape Here

Note: This is a list of angel networks, institutional venture firms, and private equity capital providers in the Southeastern United States that are currently active with Assets Under Management. To request the addition of any firm not currently listed, please fill out this form.

*A reminder that for this project, we defined the Southeast as a collection of states including Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, and West Virginia. Data were aggregated and analyzed from PwC MoneyTree Reports, BIP Capital, Crunchbase, Pitchbook, and self-reported by accelerators, entrepreneurs, and investors from within the region.

 


 

MEET THE COLLABORATORS

Collaboration, as demonstrated through this project, is vital to taking the Southeast to the next level in growing and retaining more high-value companies. Here are the organizations that helped make this report a reality:

 

BUILD IN SE

Our #BuildInSE mission is to increase the number of startup success stories in the Southeast by leveraging a cross-regional, collaborative network. We build regional intelligence through our team of local ecosystem builders, Alliance partners, and investor communities, all in support of founders as they launch and scale their startups. Build In SE is a certified Benefit Corporation headquartered in Nashville, Tennessee.

 

EMBARC COLLECTIVE

Embarc Collective is a nonprofit startup hub helping founders in the Tampa Bay region build bold, scalable, thriving companies. Embarc Collective offers hands-on support driven by the unique goals and needs of each member startup at its 32,000 square-foot office in downtown Tampa. Member companies receive customized, ongoing coaching and support from startup veterans to help propel member companies’ growth. Embarc Collective works with a growing roster of 100 early-stage startups and is the fastest-growing startup hub in Florida.

Allie Felix
VP Platform at Embarc Collective
Allie Felix
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