Startups in the Volunteer State have raked in some serious capital over the last five years, but not near as much as some other states in the Southeast.
Since 2017, $4.1 billion has been invested in Tennessee startups, according to The State of Startups in the Southeast 2022 report, released Wednesday by Panoramic Ventures.
Tennessee’s funding is fifth-highest of any state in the region during that time period, behind Virginia ($9.8 billion), Georgia ($11.9 billion), North Carolina ($17 billion) and Florida ($18.8 billion).
South Carolina ($1.6 billion), Kentucky ($1.4 billion), Alabama ($979 million) and Mississippi ($242 million) followed Tennessee, according to the report.
Area tech leaders have said that attracting more capital to Nashville startups is an essential ingredient for the city’s tech and entrepreneur communities to continue to grow, especially for non-health care startups.
While Tennessee’s ranking in the region has not changed since the 2019 report, the state has nearly doubled the amount of capital it’s raised over the previous five years, from $2.1 million. In fact, check sizes in the state have increased 26% since last year, according to the report.
The state’s top sectors for investment were health care IT, with 193 deals totaling $1.8 billion; software-as-a-service, with 161 deals worth $752 million; and fintech, with 60 deals worth $364 million.
The report also listed some notable exits in Nashville over the last five years, including Clover Health, which was sold to Social Capital last year for $4.5 billion; NaviHealth, which was sold to Optum in 2020 for $2.9 billion; and Confirmation.com, which was sold to Thomson Reuters in 2019 for $377 million.
