Local investors and companies are key contributors to the Southeast’s startup investment ecosystem, although Orlando lags the contributions made by fellow Florida markets Tampa and Miami.
Since 2016, Florida leads all southeastern states with $12.9 billion invested in the Sunshine State’s startups, according to the State of Startups in the Southeast in 2021 report by Panoramic Ventures.
The report from the Atlanta-based venture capital firm took a look at startup activity in nine Southeastern states from Jan. 1, 2016, to June 30, 2021. Data for the report came from primary and secondary research as well as dialogue from growth equity funds, service providers and startup ecosystems in general.
These trends are important because access to venture capital can be critical for local startups as it often funds growth at early-stage companies. The growth of high-tech companies is important for Central Florida, as those firms create high-wage jobs and help diversify the region’s economy.
VCs, accelerators and exits
Three local firms and organizations are among Florida’s most active startup investors since 2016, the report found:
- Orlando-based DeepWork Capital LLC was the second-most-active venture capital investor in the state, with 21 investments in Florida firms. Tampa-based Florida Funders was No. 1 with 54 Sunshine State investments. DeepWork aims to make more investments, as the firm in June was raising money for its third fund, Managing Partner Ben Patz previously said.
- Orlando-based startup accelerator StarterStudio was the third-most-active among accelerators and incubators with 24 investments. StarterStudio invests up to $25,000 in companies that complete its seed stage program and meet certain milestones. Tampa-based Tampa Bay Wave led the state’s accelerators and incubators with 37 deals.
- The University of Central Florida Business Incubation Program was third among Florida’s government-backed investors with 30 investments. StartUP FIU at Florida International University in Miami led the pack with 39 investments.
Meanwhile, Orlando-based PureCycle Technologies Inc. is ranked as one of the Southeast’s most notable exits in the first half of the year. The recycling technology company went public in March via a $1.2 billion merger with special-purpose acquisition company Roth CH Acquisition I Co. It was the second-biggest exit in Florida in the first half of 2021, according to the report.
Surging confidence in the Southeast
While the number of venture capital deals across the Southeast each quarter is down compared to pre-pandemic levels, the amount of capital invested continues to increase. Total capital deployed across the region reached its highest level historically at $4.97 billion in second-quarter 2021.
"Following the initial shock of the Covid-19 pandemic that slowed funding in Q2 2020, capital has continued to flow into the Southeast at record levels, signaling investors’ continued confidence in the region," the report said.
Despite leading the Southeast since 2016, Florida ranked third in the Southeast for deployed investment capital in the first half of this year with $1.67 billion, according to the report. The Sunshine State trailed North Carolina ($2.2 billion) and Georgia ($2 billion).
The top three industries for venture capital investment in Florida in the four-and-a-half-year period were media ($3.2 billion), software as a service ($2.1 billion) and fintech ($1.7 billion), respectively.
Alabama Inno Reporter Tyler Patchen contributed to this report.
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