Georgia venture funds have bucked the national trend of declining capital raises, picking up a record $1.36 billion so far this year.
That puts Atlanta ahead of other emerging startup hubs like Raleigh, Austin, Nashville and Denver.
Atlanta venture capital firms have raised the sixth-largest amount in the country so far this year, according to a new report out from PitchBook and the National Venture Capital Association.
It's particularly significant because most local experts say Atlanta's biggest obstacle to growth is a lack of capital sources based in the city. But even though the total amount raised is high for Atlanta, the number of funds appears to be decreasing from previous years, which could mean fewer options for startup founders.
Nationally, venture funds have failed to come anywhere near the record-setting raise total of $172.5 billion in 2022. As of the end of September, venture funds had raised just a quarter of that, according to PitchBook.
The big total in Atlanta this year was driven by just one fund: Suwanee-based Cloud Toronto Venture Capital, which closed a $1 billion round on the first day of 2023, according to PitchBook.
Founder and CEO Dilip Mooparakath told Atlanta Business Chronicle he could not disclose the size of the fund but confirmed Cloud Toronto has a very large fund.
It's one of the largest funds to close this year across the country. Only three firms, all outside of Atlanta, raised larger funds.
Cloud Toronto has invested in success stories such as SpaceX and Impossible Foods (maker of the Impossible Burger) in the past, according to PitchBook data.
A few other major funds that closed this year include TTV Capital's $250 million fund and Wellstar Health System's $100 million Catalyst fund.
But so far this year only five funds in Atlanta have closed, far below the 26 of 2021 or even the 11 from last year.
And not every investor is seeing an influx of dollars.
Nationally, almost $3 out of every $4 raised this year has gone to established VC managers, and just over half of all capital raised has gone to funds with $500 million or more in assets under management so far this year, according to PitchBook.
Shila Nieves Burney, managing parter at Atlanta's Zane Venture Fund, said she has noticed a "pronounced shift" in investor enthusiasm for her fund's mission of investing in minority founders compared to the support for that mission in 2020.
Nevertheless, the Zane team is forging ahead.
They have soft launched their second fund and have picked up early commitments, an "exciting" development, said Burney. That means she and her team are on the lookout for more strong, emerging companies to invest in.
