A new normal is starting to emerge for Georgia startup fundraising.
Back in 2021, Georgia startups raised raised over $4 billion across 319 deals. The next year, fundraising fell significantly across the nation. Now, in the first three quarters of this year, Georgia startups have raised about $1.2 billion across 154 deals, according to a new report from PitchBook and the National Venture Capital Association.
The fundraising amount is much closer to the state's pre-pandemic totals of about $2 billion raised annually across 200 or so deals.
“I think the bubble of 2021 is really normalized now,” said Philip Lewis, a partner at Fulcrum Equity Partners. “Good companies are raising at [what] I would call very reasonable multiples, fair multiples. … The trend line feels pretty healthy.”
Meanwhile, venture capital funding is still declining nationally. It's at its lowest point since 2018, according to the PitchBook report.
National highs and lows are more muted in Atlanta, Lewis said. He thinks the startup scene here is on a steady growth trajectory and has reached maturity.
The high-profile exit of Atlanta startup Salesloft Inc., which was acquired for $3.2 billion by Vista Equity Partners in 2022, and other exits have pushed experienced entrepreneurs back into the Atlanta ecosystem, adding additional strength to the city’s market, Lewis said.
The state saw just one exit in Q3. Carroll Real Estate was acquired by RMR Group for $80 million, providing a toehold in a new market for Massachussetts-bsed RMR. Carroll provided asset and property management services for multifamily properties in the South.
“This gentle thaw in capital indicates a potential resurgence in the investment space,” said Shila Nieves Burney, managing partner at Atlanta’s Zane Venture Fund.
Georgia VC firms have raised record amounts for the state this year, according to PitchBook, anchored by one major deal from Suwanee-based Cloud Toronto Venture Capital.
The largest Q3 startup deal came from OneTrust's $150 million round in July. That round was led by Generation Investment Management, helmed by former vice president in Al Gore.
Founded in 2016, OneTrust helps businesses protect customer data, comply with privacy guidelines, assess risks and manage ethics. It has dual headquarters in Atlanta and London and employs more than 2,000 people globally.
The second-largest deal came from Tractian's August close of a $45 million round.
In contrast to the high total value of deals in Georgia in Q3, the number of deals done was relatively low, with just 49 deals. Though that’s more than the 37 deals done in Georgia in Q2, it’s lower than all other quarters since 2020.
