Atlanta’s sundry startups join in global VC funding boom

Atlanta’s sundry startups join in global VC funding boom

In a $12 billion deal, mailchimp is selling itself to Intuit. The transaction is a win for not only firms that avoid venture money — Mailchimp known for its bootstrapping past— but also for Atlanta, where the company founded. According to Crunchbase statistics, Mailchimp’s mega-exit comes the same year that rival Atlanta-based firm Calendly secured a whopping $350 million round, valuing the technology business north of $3 billion.

The two firms demonstrate that substantial startups may be built-in markets other than those traditionally associated with technological entrepreneurship in the United States, such as Boston, New York City, and San Francisco, to mention a few. Observant investors are taking notice. According to CB Insights statistics through Q2 2021, Atlanta entrepreneurs are on a fundraising spree, having already surpassed total money raised in 2020 in the first half of this year. The city’s venture acceleration is comparable to what we have seen in cities like Chicago in terms of fundraising growth.

The Exchange wants to learn more about the Atlanta market, particularly how optimistic its local inventors are that its present fundraising pace can maintained and what kind of external interest its firms are receiving. 

Therefore, we asked Sean McCormick, CEO of Atlanta-based SingleOps, a software business that secured money earlier this year, A.T. Gimbel of Atlanta Ventures, and Ashish Mistry of BLH Venture Partners questions. Paul Noble, the CEO of Verusen, a supply chain analytics business that secured an $8 million Series A investment in January, also spoke with us.

The image that emerges is of a city seeing a surge in venture activity, aided by some unique features that may have aided some of the city’s early-stage businesses in scaling more affordable than they may have in other markets. Moreover, there is a lot of reason to be optimistic about the near future. Let us have a look.

It is trite to say that a specific territory is witnessing record venture capital inflows at this time, but many cities, regions, and nations are seeing startup capital inflows increase. Despite the generally favorable atmosphere for private capital investments in private enterprises, there are places where the profits still stand out.

One such market is Atlanta. According to CB Insights, the city in the United States received $2.17 billion in total investment in 2020. Atlanta’s startups raised $2.07 billion in total financing in the first quarter of 2021, virtually matching their sum in the first quarter of 2020.

In the second quarter of the year, another $953 million invested; keep in mind that venture capital reporting is sluggish, so what appears to be a severe fall may mitigated by subsequent announcements.

However, with over $3 billion invested in the first half of 2021, a 50 percent increase over the full-year data for 2020, it is apparent that the city is seeing an unparalleled wave of venture capital.

Of course, the venture capital activity matrix divided in half by the dollar volume. Deal volume is another important metric for the investment type. Atlanta’s activity is less impressive; in Q1 2021, Atlanta startups attracted 57 total agreements, which is the second-best outcome we have statistics for, after only Q3 2017’s 59 deals. However, Atlanta’s known venture transaction volume fell to 42 in Q2 2021, a modest decrease from the average deal volume reported on a quarterly basis in 2020.

The same warning about delayed data applies here, but it may not be enough to cover the gap between what we may have expected from Atlanta startups in terms of Q2 transaction volume after the city’s super-active Q1. Despite a sluggish transaction count in Q2 2021, it is evident that Atlanta is attracting historic venture capital attention, according to current statistics. What is causing the increase? Let us have a look.