SSR - January 19, 2024

Wow. What a rebound from the last Southern Startup Report! Check out the funding rounds listed below. Miami in particular was red hot over the last two weeks. Also in the report today – tons of startup M&A transactions. Lots of movement happening.
 

Louisiana

New Orleans-based Crescent Canna sold its millionth can of Crescent 9 THC Seltzer. Launched just last year, the beverage is now sold in bars, music venues, convenience stores, and groceries across the state. You may be thinking - how is this legal? It's made with hemp-derived delta-9 THC, which is legal nationwide. GNO, Inc. celebrated its 20th anniversary with a record-setting 1,500 business and civic leaders at its Annual Luncheon. The event included a 2023 year in review boasting a $5B St. Charles Clean Fuels project, Big Fish Games new local office, and Shell’s new HQ in the nascent $1.5B River District. Entrepreneurship wins included a partnership with OHUB, which started a tech accelerator for 50 minority-led startups, five of which will receive $250K each. NO/LA Angel Network also released its 2023 year-end report, showing a strong year with $3.7M invested in 16 companies and 2 successful exits. In 2023, NO/LAAN also closed its second sidecar fund, The Pelican Angel Fund II, and received national recognition from the Angel Capital Association. Chaffe & Associates 2023 M&A Report shows a significant drop in activity, mirroring a slow global M&A market. Overall, LA saw 187 deals in 2023 - a 11.2% decrease from the 208 deals struck in 2022. The value of the deals is largely unknown as most transactions involved privately-owned companies.

Alabama

Veteran and minority-owned startup Primordial Ventures announced plans to open a manufacturing operation in Birmingham to produce high-quality medical supplies. The facility, expected to open in 2024, will create 30 new jobs. K1 Speed, the world’s largest indoor go-kart racing operator, has acquired Bessemer-based Autobahn and Accelerate Indoor Speedway and its 11 national locations. Following the acquisition of the sister brands, K1 Speed will operate 83 locations in 29 states and 7 countries. Finally, Alabama Inno has curated a list of 17 Startups to Watch in 2024. Check out who made the list.

Arkansas

Panacea Financial Holdings, a Little Rock fintech firm that provides financial services for physicians, dentists and veterinarians, just raised $24.5M in Series B funding to fuel its strategic growth. Valar Ventures of New York was the sole institutional investor in the round. Founded in November 2020, Panacea said it doubled its revenue last year. Arcane Capital Partners of Little Rock announced the $100M acquisition of two companies to help consolidate its plastics manufacturing operations. The two acquisitions are Petroflex North America of Gainesville, Texas, and Wescon Plastics of Wichita, Kansas. Arcane has acquired 5 companies since December 2021.

Florida

South Florida VC fundings rose in Q4 to $544M, but 2023 year-end totals hit a 3-year low. For the year, South Florida witnessed just under $2B across 375 deals, a 66% drop from 2022. From my vantage point, that’s still pretty strong! The big headline this week is that Plantation-based Magic Leap secured $590M from Saudi Arabia’s sovereign wealth fund. The debt funding comes as the company faces new competition from Apple and Meta. In total, the company has raised about $4.5B over the years. In Miami, DermaSensor gained FDA clearance for its AI-powered skin cancer detection device. The device uses spectroscopy technology to detect the three most common forms of skin cancer. The company has already raised about $27M to bring the product to market. In the clever names category, Cyrano Therapeutics, a Delray Beach-based startup pioneering the development of treatments for smell loss, just raised $9M in Series B financing to advance the first treatment for post-viral smell loss. Led by the Florida Opportunity Fund and DeepWork Capital, Cyrano has raised nearly $22M to date.

Georgia

Atomic-6, an Atlanta startup specializing in advanced composite manufacturing for aerospace, ballistic, and hypersonic applications, closed multiple funding rounds for a total of $9.2M. Funding includes an equity round of $4.95M from many investors, including several retired military leaders, and a SBIR non-dilutive grant worth $4.24M awarded by the US Air Force and Space Force. Atlanta-based FeatherPay, a payments startup in the medical and dental space, has been acquired by Florida-based iCoreConnect, a NASDAQ-listed healthcare software company. The entire FeatherPay team is joining iCoreConnect.

Mississippi

Innovate Mississippi announced a new Oxford Delta Angel Fund, set to launch in February. The angel investment group aims to raise $1 million to fuel the growth of Mississippi startups. Investors can sign up for updates and stay informed here. Innovate Mississippi’s new slate of networking events kick off on February 1st in Jackson. The group is also seeking mentors for the 2024 calendar year to support entrepreneurs. To learn more, contact them here.

North Carolina

In Q4, the Triangle Tweener Fund made 10 investments, including 6 new companies for a total of $500K. Robbie Allen, the fund’s general partner says, “Of our 6 new investments, 4 are Tweeners (over 1M ARR) and the other 2 are in the very hot categories of e-commerce international shipping and health data collection.” In 2023 YTD the Tweener Fund made 59 investments with an average investment of $50K – all in the Triangle. Raleigh Founded, a local coworking space, recently moved into a swanky new 36,000 SF space on W. North St. With a large classroom, meeting rooms, event space, and offices for teams of up to 50 people, the new digs provide ample room for growth. Congratulations to Helixomer for securing a $2M NIH grant for anticoagulant development. Its products are intended to compete in the $10B global market for heparin, the leading anticoagulant.

Tennessee

Governor Bill Lee joined with leaders of the Tennessee General Assembly and music industry execs to announce a proposed bill to protect music industry professionals from the misuse of AI. Dubbed the “Ensuring Likeness Voice and Image Security (ELVIS) Act,” it is described as the first legislation of its kind in the nation. The ELVIS Act would build upon an existing state rule protecting against the unauthorized use of someone’s likeness by adding “voice” to the realm it protects. CO.LAB in Chattanooga and gener8tor announced the selection of 5 startups for their inaugural Sustainable Mobility Accelerator.Over 145 start-ups from 25 countries applied for the program. The participants include 3 from CA, 1 from FL, and 1 international startup. Congrats to all. We can’t wait to see what you build!