Stories of Technology, Innovation, & Entrepreneurship in the Southeast

Since its inception, Launch Tennessee’s $70 million equity investment fund, InvestTN, has backed 39 Tennessee companies. Recently, Teknovation has reported on many InvestTN portfolio companies, such as Whitecoat Learning Platform in Nashville, Ascend Manufacturing in Knoxville, EIR Systems in Chattanooga, and ATS Innovations in Cookeville.

During FY25 alone, 25 new startups received support as the fund accelerated its deployment pace and broadened its reach across the state.

The geographic spread maps out where momentum is building. Twenty‑one portfolio companies sit in and around Nashville, eight call Knoxville home, seven are based in Chattanooga, and four are from Memphis. Launch Tennessee leaders say this mix reflects both the strength of the state’s core innovation hubs and the emerging talent from smaller markets.

As of June 30, 2025, the Regional Seed Fund and Growth Fund had deployed $13.015 million, including $5.535 million during FY25.

Additionally, InvestTN made $3 million investments into both Veteran Venture Capital and Market Square Ventures, which can then be turned around and uses to invest in more local companies.

Catalytic effect of the state’s investment fund ($1.8 billion VC invested)

The capital flowing from InvestTN is meaningful for a couple of reasons. Most importantly, though, is that it attracts outside investment.

For every one dollar invested, roughly four dollars of private funding follow. Eller Kelliher, Launch Tennessee’s Chief Investment Officer, said the model for the matching structure of the fund was an intentional effort to get investors off the sidelines.

In many respects, the effort was effective. 188 Tennessee‑based companies secured venture funding, with a median deal size of $2.07 million.

What are InvestTN’s next steps for 2026?

In a year-end report generated by Launch Tennessee’s Jay Teamer and Reed Hooks, they outline the organization’s three key initiatives moving into 2026.

1. Increase catalytic efficiency

“We will refine our underwriting processes and capital structuring to maximize private capital leverage per dollar invested. Our goal is not simply to deploy more capital, but to increase the multiplier effect of each investment,” the report said.

2. Expand founder outreach across regions

“Geographic analysis shows meaningful representation in smaller communities, but also highlights opportunities in markets such as Memphis and other underrepresented regions. We will increase proactive sourcing, regional engagement, and ecosystem partnerships to ensure founders statewide have access to InvestTN capital,” the report said.

3. Strengthen later-stage participation

“As Tennessee valuations increase and rounds grow in size, we will evaluate how the Growth Fund can more effectively anchor and participate in Series A and B financings. Keeping high-growth companies headquartered in Tennessee requires competitive capital at scale,” the report said.

If you are interested in learning more about Launch Tennessee’s impact on the state’s startup ecosystem in 2025, read the full report.

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