The South’s Most Active Startup Investors

The American South is not all barbecue and shrimp and grits. It turns out that there are plenty of interesting startup companies in the region, and where there are startups, there are investors too.

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As a follow-up to the deep dive into Southern startup funding data Crunchbase News did last week, we ranked the most active investors in each sub-region of the South as defined by the U.S. Census Bureau.

As will be the case for all charts we’ll discuss here, we’ve counted the number of venture investments (angel, seed, convertible notes, Series A, Series B, etc.) each Southern investor made—and was recorded in Crunchbase data—from the beginning of 2017 through the middle of March 2018.

West South Central’s Most Active Investors

We’ll go from West to East, starting first with the inelegantly-named “West South Central” subregion comprised of Oklahoma, Arkansas, Louisiana, and Texas. This subregion accounted for 28 percent of the South’s deal volume in 2017, and Texan startups raised 27 percent of all Southern rounds between 2017 and mid-march 2018.

The chart below displays the most active investors out of the more than 200 investors from West South Central states which made investments in the past fifteen-ish months.

As will turn out to be a common theme, some of the most active investors are going to be accelerator programs and other investors primarily focused on early-stage ventures. What’s less common is an angel investor as active as Dallas Mavericks owner and television personality Mark Cuban. According to Crunchbase data, Cuban made nineteen recorded venture investments between January 2017 and March 2018.

Other highlights in this list include Austin-based Capital Factory, one of the most active accelerator programs in the entire South. Deep Space Ventures is also interesting given that it’s one of the few most active investors with a specific sector focus in esports. The Michael and Susan Dell Foundation is the only family foundation to make it near the top of any of our ranks here.

East South Central’s Most Active Investors

Kentucky, Tennessee, Mississippi, and Alabama are home to another set of interesting investors, albeit ones that are generally less active than their counterparts a little further west. Startups in these four states raised just eight percent of the region’s venture rounds in 2017.

Below, you’ll find a chart displaying the most active investors in this region.

The most active investor in this subregion, Innova Memphis, is an early-stage biotechnology and agtech investor. The firm has made recent investments in companies like drone-based crop analytics provider Skycision, blood pathogen separation technology firm PATH EX, and Preteckt, which uses machine learning to anticipate vehicle service needs.

Velocity Accelerator is based in Birmingham’s Innovation Depot, a 140,000 square foot facility which is home to nearly 100 startups and small businesses. Chattanooga, Tennessee-based Dynamo is another program which focuses on the logistics sector. Dynamo’s portfolio is also surprisingly diverse, from a geographic perspective, with investments in Seattle-based Seeva, London, UK-based Zeelo, and SkyDrop, which is based in Monterrey, Mexico.

To close our adventure out, let’s move on to the South Atlantic.

South Atlantic’s Most Active Investors

Granted, the South Atlantic does have a few advantages over the other two subregions of the American South, not least of which is the large number of states. But, nonetheless, the South Atlantic accounted for 64 percent of the known Southern state deal volume in 2017.

The chart below displays the most active investors based in the South Atlantic states.

D.C.-based Arab Angel Fund is a VC fund focused primarily on seed and Series A-stage rounds raised by companies that have international expansion potential. The $25 million fund helps to broker connections between U.S. startups and markets in the Middle East and North Africa. Its portfolio companies include Hello Heart, Babyscripts, Current, and Shogun Enterprises, among others.

Other notable investors on this list include Union Kitchen, a food-focused accelerator that’s made seed-stage investments in food startups like Fancy Schmancy, pork-free cracklin’ manufacturer Snacklins, and “an ice cream company that pays devotion to the Dairy Gods” called Milk Cult.

The Maryland Technology Development Corporation (TEDCO) is another. Created in 1998 by the Maryland State Legislature to commercialize and invest in technology developed in the state’s universities, the group makes a number of investments in research-based ventures like cybersecurity companies Ataata, Zuul IoT, SecondWrite, and TrackOFF.

What We Learned Here

Although the South isn’t traditionally thought of as a particularly technical or entrepreneurial region (compared to, say, the West Coast) it’s in most ways no different than the rest of the USA. There are plenty of startup companies of all shapes, sizes, and focus areas, and there are investors of all types, too.

From prolific super-angels like Mark Cuban, to sector-focused accelerator programs like Dynamo and Union Kitchen, and strategic investors touting a particular competitive edge like TEDCO or Arab Angel Fund, the South’s mix of investors is as diverse as the region itself.

Although Crunchbase News has previously shown that investors from the South are the most likely to invest outside of their home metro areas, they’re no more or less likely to invest outside the South than investors from the Midwest or Northeast to invest outside their home regions either. It’s likely that the South’s venture capital ecosystem will continue to grow, particularly as more founders begin to catch on to the low cost of living, excellent food, and rich if complicated history of the region.

Illustration: Li-Anne Dias