Several Atlanta startups join the global venture capital financing boom – TechCrunch

Mailchimp is sale himself to Intuit in a transaction valued at $ 12 billion. The deal is a blow not only to companies avoiding venture capital backing (Mailchimp is famous for its startup story), but also to its founding city, Atlanta.

Mailchimp’s mega outing comes the same year as the Atlanta-based company. Calendly raised a massive $ 350 million round that valued the tech company above $ 3 billion, according to Crunchbase data.

The two companies underscore how possible it is to build large startups in markets outside of the traditional collection of cities most associated with tech entrepreneurship in the United States, such as Boston, New York, and San Francisco, to name a few.

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Investors are taking notice. CB Insights data up to the second quarter of 2021 indicates startups in Atlanta are on a fundraising streak, already surpassing total capital raised in 2020 in just the first half of this year. The acceleration of city businesses is similar to the fundraising gains we’ve seen in markets like Chicago.

The Stock Exchange wanted to better understand the Atlanta market, especially regarding how optimistic its local inventors are that their current fundraising pace could continue, and what kind of outside interest their startups are enjoying. So, we asked questions about Sean McCormick, the CEO of Atlanta SingleOps, a software startup that raised capital earlier this year; Atlanta Ventures’ AT Gimbel; and BLH Venture Partners Ashish mistry. We also hear from Paul Noble, Director of Verusen, a supply chain intelligence startup that raised an $ 8 million Series A round in January.

The image that is formed is that of a city enjoying a rising tide of risk activity, driven by some local dynamics that may have helped some of its earlier-stage companies to scale at a cheaper price than they could have. made in other markets. And there is a lot of optimism about the near future. We are going to explore.

A financing boom

It is a cliche at this point to note that a particular geography is experiencing record venture capital results; many cities, regions and countries are experiencing an acceleration in initial capital inflows. But there are markets where earnings still stand out despite generally warm weather for private equity investments in private companies.

Atlanta is one of those markets. According to data from CB Insights, the US city recorded $ 2.17 billion in total investment during 2020. In the first quarter of 2021, Atlanta nearly equaled its 2020 account, with its startups raising around $ 2.07 billion in total capital. Another $ 953 million was invested in the second quarter of the year; Note that venture capital data is out of date and therefore what may appear to be a sharp decline can be improved with subsequent disclosures.

But with around $ 3 billion invested in the first half of 2021, already around a 50% gain over the full-year 2020 figures, it is clear that the city is experiencing an unprecedented wave of venture investment.

Dollar volume is half of the venture capital activity matrix, of course. The other key data line for the type of investment is the volume of transactions. There, Atlanta’s activity is less superlative; In the first quarter of 2021, Atlanta startups attracted 57 total deals, the second best results for which we have data, narrowly losing to the 59 deals in the third quarter of 2017.

But the second quarter of 2021 saw Atlanta’s known risk deal volume drop to 42, a figure that’s a slight loss from the 2020 average deal volume, measured quarterly. The same caveat regarding lagged data applies here, but perhaps not enough to fully bridge the gap between what we might have expected from Atlanta startups in terms of second-quarter deal volume in the wake. of the city’s super active first quarter.

Despite Atlanta’s somewhat sluggish count of second quarter 2021 deals, based on current data, it’s clear the city is enjoying record venture capital attention. What is driving the rally? Let’s find out.

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