Stories of Technology, Innovation, & Entrepreneurship in the Southeast

Launch Tennessee (LaunchTN) and Jay Teamer, the LaunchTN Venture Fellow, have released the second quarter “Tennessee Deal Report” that takes a look at the nation as well as the Southeast region and the Volunteer State.

According to the report for the Southeast compared to the nation, there were several callouts:

1. The Southeast is smaller in scale but follows national trends. In Q1 and Q2, the region recorded 1,020 deals involving 1,193 investors, 26 exits, the largest deal of $545 million, total capital of $6.52 billion, and a median post-money valuation of $31 million. Over the same period, the United States recorded 10,098 deals with 9,277 investors, 100 exits, the largest deal of $40 billion, total capital of $173.89 billion, and a median post-money valuation of $42.75 million.
2. In the Southeast, capital in Q1 and Q2 was led by Software-as-a-Service (SaaS) at $2.80 billion, artificial intelligence/machine learning (AI/ML) at $1.70 billion, and a tie between fintech and mobile ($1.08B each). By company count, the region leaned toward AI/ML at 26.75 percent and SaaS at 25.50 percent, with health tech at 14.32 percent and fintech at 12.75 percent.
3. Nationally, the picture was even more AI-weighted, with AI/ML leading at $109.12 billion and 35.6 percent of companies, followed by SaaS at $94.44 billion and 28.85 percent, big data at $72.13 billion, health tech at 12.34 percent, and fintech at 10.06 percent.

For Tennessee, the report notes that:

1. Tennessee logged 66 deals in Q1 and 65 in Q2. Despite a rebound from Q4 2024 to Q1 2025 followed by a dip in Q2, the first half of 2025 has already surpassed all of 2024 and outpaced the first half of 2024, as well as broader Southeast and U.S. growth. This signals a strong start with a seasonal cooldown rather than a loss of momentum.
2. Capital deployment in the first half of 2025 reached $771.3 million compared to $436.4 million in the first half of 2024, with $459.4 million in Q1 and $311.9 million in Q2. The largest deal was $130 million in Q1/Q2 versus $95 million in the first half of 2024, highlighting larger check sizes and a front-loaded start despite the usual Q2 reset.
3. Investor-to-deal ratio: Q1 had 93 investors across 66 deals (1.41 per deal). Q2 tightened to 61 investors across 60 deals (1.02 per deal), signaling smaller syndicates.
4. Interpretation + key drivers: Q1 was front-loaded, followed by a pause in Q2. Fewer investors per deal alongside a higher Q2 median post-money indicate more concentrated, higher-conviction rounds, shaped by fund seasonality, macro selectivity, and consistent state and local follow-on support.

The full report can be found at this link.

---