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October 19, 2023 | Tom Ballard

BIP Capital releases latest “State of Startups in Southeast” report

The section on Tennessee notes a trend toward larger-scale investments in fewer companies.

The latest edition of BIP Venture‘s “State of StartupsSM in Southeast” report has been released, and it provides a snapshot of trends that are impacting the investment sector.

As noted in the email announcing the availability of the report, it was noted “that the Southeast start-up environment is in a maturation period. Fewer deals are happening, but the dollar value for deals has increased. Exceptional companies continue to be funded. And innovators and investors appear to be realigning around tried-and-true business fundamentals.”

Other findings include:

  • Start-up stage definitions have become a moving target;
  • Southeast investments trail other innovation markets (and that’s good);
  • Real-world issues are pushing new sectors to the forefront; and
  • Larger deal sizes are chasing inflation rates and accelerating innovation.

“A lot has changed since we began producing this report, including how we define seed deals and which sectors capture investors’ attention,” wrote Mark Flickinger, BIP General Partner and Chief Operating Officer. “But what hasn’t changed is that the Southeast region has a lot to offer to innovators and investors.”

The section covering the Volunteer State read as follows:

“Tennessee is making larger-scale investments in fewer companies and focusing on SaaS (software-as-a-service) and healthcare start-ups. Specifically, 241 healthcare IT (information technology) companies have garnered $2 billion in funding since 2018, and 294 SaaS companies have taken in $838 million in funding YTD 2023. The state is on track to hit the investment trends it has set over the past few years. Deal counts (80) are on the low side, but dollars invested are high – in fact, they have already outpaced total investments made in 2018, 2019, and 2020. Interestingly, the state also has a spate of new players in almost every investor category.”

The authors also explain that there are “reasons for measured optimism. Founders are developing healthier investment partnerships. A focus on sustainable growth has replaced distracting competition for multiple rounds. And the Southeast is earning its reputation as a region where being observant, measured, and focused on the long term is a proven recipe for exceptional outcomes.”


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