By Tom Ballard, Chief Alliance Officer, PYA
Three Tennessee-based organizations are celebrating following an announcement Wednesday from the U.S. Economic Development Administration (EDA) that they were collectively awarded more than $4.2 million. The three – two from West Tennessee and the other with statewide responsibilities – were among 51 recipients sharing $47 million under the federal agency’s “Build to Scale” initiative to support technology entrepreneurs, catalyze innovation, and fuel economic growth.
Those receiving the good news were:
- Memphis-based AgLaunch, which is a regular collaborator with the Knoxville Entrepreneur Center, Sync Space Entrepreneur Center (Kingsport), and The Biz Foundry (Cookeville), was awarded $1.5 million under the federal agency’s “2022 Venture Challenge” grant program;
- Launch Tennessee, the statewide support organization for entrepreneurs, received $2 million under the same program; and
- The University of Memphis was awarded $700,196 under EDA’s “Capital Challenge” grant program.
According to the news release, the 2022 awardees will leverage an additional $48 million in matching funds from a variety of private and public sector sources. These EDA investments support advanced manufacturing, bioscience, clean energy and blue economy clusters in regions throughout the United States.
We noted that California had the most winners with four, and only two other states – Michigan and New York – had three recipients like Tennessee. All three are much larger than the Volunteer State.
The 2022 “Build to Scale program” was comprised of two competitions. The “Venture Challenge” initiative supports program that enable high-growth technology entrepreneurship and foster inclusive access to proven entrepreneurship support models. The “Capital Challenge” increases access to capital in communities where risk capital is in short supply by providing operational support for early-stage investment funds, networks, and training programs that focus on both traditional and hybrid equity-based financing.
According to information provided by EDA, the program priorities are complementary for each recipient but also distinctive.
AgLaunch seeks to grow the infrastructure and technology created with previous awards from the federal agency across four additional key agricultural regions with existing partners to leverage and attract additional investment in those regions. AgriX3, established with support from a past EDA award and other funding sources, is a unique accelerator platform to propel the agricultural innovations of the future – focused on augmented intelligence, autonomous farm equipment, biological pesticides, carbon remediation, and sustainable metrics. AgriX3 refers to the interrelated and aspirational goals of (1) nutrient dense food, (2) carbon negative farms, and (3) equitable ownership across the agri-food value chain. AgriX3 scales AgLaunch’s successful programs by “tying all the pieces together” to get a compound network effect. The main service area for the proposed project is the 98-county Mid-South Delta region in Arkansas, Kentucky, Mississippi, Missouri, and Tennessee. This project will build around the existing Delta “founding” cluster and leverage the national regional cluster network to compound the efforts (Midwest, Southern Plains, Pacific Northwest, and Appalachia) of AgriX3.
Launch Tennessee will use the EDA investment to support implementation of the expansion of its industry networks to achieve greater results across the Tri-Cities, Greater Knoxville, Greater Chattanooga, Cookeville, Greater Nashville, Jackson, and Greater Memphis regions. This project’s objectives are to: (1) further Tennessee’s technology assets and prior work with the advanced energy, agricultural technology, automotive/mobility, and life science industry sectors, and to add new industry sectors by adding consumer products/advanced manufacturing and financial technology; (2) expand a statewide implementation of entrepreneurs-in-residence (EIR) programs, leading to further connectivity in targeted regions; and (3) ensure founders and companies in key industries have support accessing early stage capital.
The University of Memphis (U of M) will launch the “Black Wealth Advancement through New Business and Knowledge Development” (BANK) project in collaboration with Community LIFT and the Black Business Association of Memphis (BBA) to facilitate equity investments in small technology-oriented businesses. Community LIFT is a Community Development Financial Institution (CDFI) and has a successful track record of raising investment funds for the Memphis region. BBA has a long history of providing education, advocacy, and business development resources for Memphis businesses. With the largest percentage of Black tech talent and female tech talent of any city in the United States, Memphis also has the largest percentage of Black-owned businesses of any city in the country. During the performance period, the U of M will coordinate this effort to increase the capacity of Community LIFT to raise capital and the BBA to use its business expertise and networks to assist Community LIFT with fundraising. This award will be used to hire additional staff responsible for raising equity-based capital funds and to hire a fund director and training coordinator to amplify and drive investment towards the region’s tech-based businesses with growth potential.