SSR - December 15, 2023

Written By Claire Tilmont

Nationwide, startups are struggling right now. The South is no exception. In Q3, Carta, a cap-table management platform, reported the highest number of startup shutdowns since its service launched in 2012. According to Carta, there were 212 startup shutdowns last quarter, a 25% increase from the previous quarter, and a 50% uptick from the same period last year. Even well-funded startups have shuttered their doors in recent months. Convoy, a Seattle freight startup valued at almost $4B, shut down in October. Olive AI, a Ohio-based unicorn that raised $857M, closed its doors in October as well. Cali-based startup Veev shut down in November after raising $600M in funding. I have not seen many massive shutdowns like these in the South. We like to joke in New Orleans, “we’re so far behind, we’re ahead.” I’m hoping we never catch up in this regard.

Louisiana

LED’s 2023 Annual Report was just released, showing “record economic growth” for Louisiana in contrast to a nationwide slump. Highlights include $25B in capital investments this year, the highest annual total in history, bringing total statewide capital investment since 2016 to over $100B. Energy and emissions reduction projects are driving much of the investment with more than $14B in CAPEX and 11,500 potential new jobs from 2023 energy projects alone. Download the complete report here. Tulane’s Lepage Center for Entrepreneurship also released its 2023 Greater New Orleans Startup Report. Like LED’s glowing statewide results, this report is also very positive. “New Orleans area startups are staffing up and attracting more investment funding despite headwinds from higher interest rates, inflation and pessimism over the national economy.” Read the full report here.
 
So many accolades to report today! Congrats to Glass Half Full founders Maxwell Steitz and Franziska Trautmann for making the Forbes 30 Under 30 list. Congrats to the IDEAinstitute Pitch Night grand winner, S.C.H.O.O.L.S. founder Dr. Valencia Belle, who competed against seven other founders in the Fall 2023 cohort for $1K in non-dilutive funding. Finally, congrats to Baton Rouge-based Studyville, the only Louisiana business named as one of America's Top Small Businesses by the U.S. Chamber of Commerce. Studyville, which launched in 2020, is a place where junior high and high school students can receive tutoring and do schoolwork in a comfortable environment.

Alabama

Congratulations to two Alabama companies for taking home $75K in non-dilutive funding at the Alabama Launchpad Cycle 2023 Finale. The grand prize of $50K went to Autonoma, a business that creates autonomous vehicle simulation and validations tools. DevClarity, an AI-powered platform for proactive developer management, took home $25K in the concept stage category. In more ESO news, REV Birmingham announced the first round of black business owners accepted to their Magic City Match program powered by Prosper. Read more about the program and awardees here. Finally, the Central Alabama Redevelopment Alliance also announced its fourth cohort for the Central Alabama Micro Business Accelerator. Congrats to the participants!

Florida

In Miami, Ascendo Venture Capital, an early-stage VC firm, announced that it is raising its first fund with a goal of $50M. Ascendo seeks to invest nationwide in “early-stage companies led by diverse founders who are often overlooked and underfunded.” The fintech startup SellersFi secured a $300M credit facility from Citi and Fasanara Capital as well as new equity funding from Citi, Mitsubishi UFJ Financial Group, Fasanara Capital, and Northzone. While the exact amount of this funding round remains undisclosed, the company confirmed that it has raised a total of $65M since inception in 2017. Blue Innovations Group, a marine technology company, announced the  launch of its flagship product, the R30 electric boat, the first-of-its-kind recreational electrical boat. In Dania Beach, Pave Mobility completed a corporate reorganization and capital raise. Pave is a parking-enforcement solutions provider that offers tools to simplify parking operations, including a digital parking management system employing License Plate Recognition in more than 450 locations throughout the US.

Georgia

At the end of a fairly depressed year of funding, Hypepotamus surveyed Atlanta-based angel investors to get a temperature on local, early stage investing. The results were rather positive. The Atlanta angel investment group TiE Atlanta Angels invested in 15 companies over the course of the year, including healthtech, agritech, future-of-work, fintech, and insurtech startups. The Atlanta Technology Angels (ATA) backed 7 deals this year. ATA has grown to around 50 angels right now, of which 40 made investments this year. 
 
Part of the Atlanta Open for Business Fund supported by Wells Fargo, Invest Atlanta just launched a $1M Atlanta Startup Growth Loan Program to support Atlanta tech startups. The program offers loans from $50K - $150K at low interest rates. Read more about the qualifications and program details here.

North Carolina

There are three new North Carolina VC funds to introduce today. Wilmington-based Canapi Ventures announced a $750M capital raise for its Fund II. This brings Canapi’s total assets under management to $1.4B. The firm specializes in early-stage fintech. Fund II will include investments in the firm’s signature industries, such as fraud and identity, financial infrastructure, lending and credit, payments and real estate technology, and will expand the firm’s focus to include AI governance, cybersecurity, and climate tech. Second, Raleigh-based Oval Park Capital is raising money for its next fund, a $20M vehicle focused on "deep tech" startups. The fund, called OPC Opportunity Fund I LP, has already raised $7.4M from 22 investors. Third, Falfurrias Management Partners, a Charlotte-based lower middle-market PE firm, closed FGP I fund at $400M. FGP invests in growth-oriented, lower middle-market businesses in the software and business services sectors. Within these sectors, the fund targets specific areas that include fintech, technology services, info services, marketing services, data & analytics, and vertical software, among others. Investments will range between $20M and $50M.

South Carolina

Lots of movement afoot in South Carolina. Healthcare tech startup QuicksortRx is relocating its headquarters to Charleston and adding 41 new jobs over the next three years. A new AI startup called dotflo has also chosen to plant its headquarters in Greenville, South Carolina. Congrats to Dealerverse, a Greenville-based startup, recently accepted as a member of the South Carolina Research Authority. Dealerverse is working on AI technology that “combines creative content, technology and results into one AI-driven, decision-making tool” for marketing campaigns. 

Tennessee

In climate news, a Memphis-based start-up named Graphyte landed its first big customer to capture and store carbon underground. Backed by Breakthrough Energy Ventures, the Bill Gates fund, Graphyte announced that American Airlines will be its inaugural customer, with the purchase of 10,000 tons of permanent carbon removal to be delivered in early 2025. Graphyte claims it can capture carbon for only $100 per ton, which is a significant savings over competitors that charge $600 per ton. American Airlines produced the equivalent of 49 million metric tons of carbon dioxide in 2022, so Graphyte’s solution is expected to deliver significant cost savings. Franklin-based Innovation Studio filed for its Innovation Studio Fund I raise with a target of $2.5M. The fund expects to launch at least 12 companies in the next 4 years.  
 
The Sync Space Entrepreneur Center unveiled a swanky new Northeast Tennessee Entrepreneurial Ecosystem Map, visually showcasing the region’s Entrepreneurial Support Organizations, programs, and other opportunities for entrepreneurs. Check it out. In other ESO news, Middle Tennessee State University, which runs the Tennessee Small Business Development Center, has been approved for a $3.8M technical assistance grant under the federal SSBCI program. They money will go towards legal, accounting, and financial advisory services for small businesses applying for the SSBCI capital program and other government small business programs.

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Claire Tilmont
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