Though inflation concerns and interest rate hikes marred the landscape in 2023, funding is still flowing into startups in the Southeast, according to a recent report.
“Nationally, gone are the days of ‘growth at any cost’ and long lists of mega deals,” BIP Ventures’ the State of Startups report read. “Instead, we see a heightened sense of responsibility and careful recalibration of venture capital funding. More acutely, we have seen a shift to follow-on and later-stage deals. Across almost every state in the Southeast, the size of seed investments has risen and seems to be staying there. And while fewer deals are happening, the ones completed are generally larger.”
The report pointed to signs of “measured optimism.”
Highlights of the report include that $5.8 billion in capital was deployed across the region in the first half of 2023, compared to $14.7 billion in second half of 2022. Further, the average check size increased $1.2 million from $5.5 million in 2018 to $6.7 million in 2023 YTD. There was a 75% increase in the size of seed deals in the Southeast, from $150,000 in 2018 to $260,000 in 2023 YTD.
Capital deployed annually increased by $1.8 billion from 2018 to the projected 2023 capital.
Alabama performed among the top in the Southeast in 2023. Halfway through the year, the total invested was $462 million — more than double the total invested in the state in 2022.
