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According to a new report from Panoramic Ventures, capital has continued to flow into the Southeast U.S. at record levels: a total of $48 billion has been invested since 2016, a 95% increase over the total invested from 2011-1H 2016. Total capital deployed by quarter also reached its peak this year with almost $5 billion invested in the Southeast in Q2 2021.
While the Bay Area has dominated VC funding historically, the Southeast and other U.S. regions are beginning to close the gap, even in a time of relatively flat to contracting growth in the number of deals completed each year. Over the past three years, while other U.S. regions saw the average year-over-year (YOY) quarterly capital deployed increase over 40%, the Bay Area only grew 22%. This trend has further intensified in 2021. However, even if the total capital deployed remained flat or declined in most regions in the second quarter of the year, the Southeast and New York experienced strong growth in VC funding. Case in point: the Q2-2021 QoQ change in deal count and capital deployed in the Southeast was 62%, and in New York was 43%.
The Southeast also continues to attract larger checks, with average check size reaching $10.5 million in the first half of 2021, a 42% YOY increase in check size. Additionally, valuation multiples in the region have also risen over the last four years, with the average post-money valuation/revenue multiple increasing from 13.4x to 20x (from 2016 to 2020).
The report from Panoramic Ventures aims to inform investors and entrepreneurs of emerging trends and highlights the area’s current and future opportunities, particularly with respect to understanding the maturation of the southeastern venture ecosystem and its capacity to generate strong returns. States analyzed in the report include Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee, and Virginia.
Data was compiled from multiple sources, including primary and secondary research.
Read the full report by Panoramic Ventures.