More than $1.6 billion invested in local companies over a 10-year period
Venture capital activity is flourishing in Nashville, creating a growing supply of funded companies that contribute to economic growth and furthering the city as a hub for innovation.
Today, Nashville Capital Network (NCN) and the Nashville Health Care Council issued a comprehensive report on the local venture capital environment, titled “Nashville Venture Capital Report: 2005 – 2015.” The report, which was released at the Council and NCN’s annual panel discussion event, explores venture capital investments in Nashville-based companies over the last decade with a special focus on venture capital investment in Nashville health care companies.
“This data highlights the evolving venture capital environment in Nashville, and illustrates the important role that VC and health care play in making Nashville an elite city for entrepreneurship,” said Sid Chambless, executive director at NCN.
Key findings in the study include:
• Since the beginning of 2005, more than $1.6 billion of venture capital investment have been received by over 300 different Nashville-based companies.
• More than $940 million was invested in Nashville health care companies by venture capital firms from 2005 through 2015. This amounts to almost 60% of Nashville’s total venture capital investment dollars over that time period.
• Since 2009, annual venture capital investments in Nashville have grown to 450% the 2009 level. This growth in investments well exceeded that of the national venture capital market, where annual venture capital investments grew to only 140% the 2009 level.
• Venture capital investment in Nashville health care IT companies grew from $2 million in 2009 to a peak of $62.5 million in 2014. Venture investment in health care IT companies surpassed that of health care services companies in 2012 and now represents the largest share of venture capital investments in Nashville health care companies.
Venture capital is also fueling the growth of emerging industries in Nashville, such as health care information technology, biotech and media.
The data from this study indicates that Nashville’s community leaders and private investors have worked together to develop a robust and thriving entrepreneurial ecosystem. Growth in seed-stage investments increased dramatically since the beginning of 2010. Improved economic conditions, the TNInvestco program, the Incite program, and local initiatives such as the Nashville Entrepreneur Center have contributed to the availability of local seed-stage capital for new ventures. On the other end of the continuum, Nashville companies have demonstrated the ability to attract later-stage growth capital from both local and outside venture capital firms. However, outside venture capital firms have not yet demonstrated a consistent appetite for investing in the earlier stages of Nashville companies.
“These trends show an exciting opportunity for Nashville investors. Early success often increases a company’s capital requirements beyond the scope of individual angel investors. Therefore, local venture resources focusing on the early-stage rounds are necessary to maintain a healthy capital continuum in Nashville,” Chambless said.
“The Council is committed to nurturing innovation and entrepreneurship as we continue to develop Nashville’s health care ecosystem,” said Hayley Hovious, Council president. “These findings show the significant investments being made in our community, and ways we can continue growth in the future.”
The report was researched by NCN and authored by Jeffrey Hull, a NCN associate. It is available on the Nashville Capital Network website.
About Nashville Capital Network
Nashville Capital Network is a network of 130 investors, most of whom have been founders and executives of Nashville’s most successful companies. NCN leverages the experience and expertise of the individuals within the group to identify, develop, and support promising, high-growth companies. NCN manages several investment funds, including NCN Angel Fund I, NCN Angel Fund II, and Tennessee Angel Fund. For more information on NCN, please visit www.nashvillecapital.com.
About Nashville Health Care Council
The Nashville Health Care Council is a premier association of health care industry leaders working together to further establish Nashville’s position as the nation’s health care industry capital. Supported by nearly 300 corporate members, the Council serves as a trusted source for information on trends that influence the health care industry. The organization provides members with one-of-a-kind networking opportunities and access to Nashville’s elite health care business community.
Worldwide, Nashville’s health care industry generates more than 500,000 jobs and $73 billion in annual revenue. The industry is Nashville’s largest and fastest-growing employer. For more information on the Council, please visit www.healthcarecouncil.com.
Contact: Katie Schlacter