BIP Ventures issues its annual report on the “State of Start-ups in the Southeast”
The report shows that funding is going to start-ups solving broad challenges in proven, high-potential sectors.
BIP Ventures, the North American-focused venture capital division of BIP Capital and one of the Southeast’s largest and most active venture capital firms, has just released its “State of Start-ups in the SoutheastSM 2023″ report. The data in this year’s assessment paints a picture of a region supporting a growing number of start-ups, many of which have demonstrated traction in stable sectors.
Nationally, gone are the days of ‘growth at any cost and long lists of Mega deals. Instead, BIP Ventures wrote that it sees a heightened sense of responsibility and careful recalibration of venture capital funding. “More acutely, we have seen a shift to follow-on and later stage deals. Across almost every state in the Southeast, the size of seed investments has risen and seems to be staying there. And while fewer deals are happening, the ones completed are generally larger,” the authors wrote.
The report shows that funding is going to start-ups solving broad challenges in proven, high-potential sectors – notably Software-as-a-Service (SaaS), healthcare tech, and fintech. Also notable is that the Southeast has not (yet) gone deep into massive artificial intelligence funding rounds, unlike the Bay Area, New York, and the Boston region.
On the whole, the “State of Start-ups in the Southeast 2023” report gives 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.
About the Volunteer State, the report notes that Tennessee is making larger-scale investments in fewer companies and focusing on SaaS and healthcare startups. Specifically, 241 healthcare information technology companies have garnered $2 billion in funding since 2018, and 294 SaaS companies have taken in $838 million in funding year-to-date in 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.
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