Atlanta's Rising Tech Scene Attracts Investment

Atlanta is rapidly gaining prominence within the technology sector, evidenced by the emergence of numerous billion-dollar companies originating from the city. This growth is not going unnoticed by the local venture capital community.

Evolution of Venture Capital Firms

While established firms, such as the recently rebranded BIP Capital, are expanding with larger fund sizes, early-stage firms like Tech Square Ventures are actively growing their teams and incorporating new partners.

New Leadership at Tech Square Ventures

The firm has recently appointed Vasant Kamath as a general partner. He transitions from Primus Capital, a later-stage investment firm also located in Atlanta. Prior to this, Kamath oversaw investments for Cox Enterprises.

Kamath's Background and Experience

Originally hailing from Augusta, Georgia, Kamath pursued his education at Harvard University and Stanford Business School.

Before attending business school, he gained experience as an investment banker with Raymond James in Atlanta during the early 2000s, marking the beginning of his career in technology. He also worked at Summit Equity Partners in Boston, focusing on later-stage technology investments.

Return to Atlanta and the Tech Renaissance

Kamath relocated to Atlanta in 2010, coinciding with a renewed wave of technology companies establishing a presence in the city.

Atlanta's Tech Infrastructure

The new general partner at Tech Square Ventures highlighted Atlanta’s robust technological infrastructure as a key factor in his decision to focus on early-stage investments. A central component of this infrastructure is Georgia Tech.

The university, situated adjacent to the Tech Square Ventures offices, is recognized as a leading engineering institution, and the caliber of talent produced by its programs is substantial, according to Kamath.

Growth of Atlanta Tech Companies

Companies like Airwatch, MailChimp, and Calendly exemplify the revitalization of Atlanta’s technology landscape, as noted by Tech Square Ventures’ newest general partner.

Major Tech Presence in Atlanta

In addition to emerging startups, major technology companies and telecommunications providers, including T-Mobile, Google, and Microsoft, are establishing significant offices, accelerators, and incubators within Atlanta.

Momentum in Early-Stage Investment

“There is considerable momentum in the early-stage sector, and I believe it is continuing to build. This is an opportune moment for a firm like TSV to capitalize on these developments,” Kamath stated.

Relationship with Tech Square Ventures Founder

Kamath’s decision to join early-stage investing was also influenced by his established relationship with Blake Patton, the founder of Tech Square Ventures. Patton, a serial entrepreneur, is dedicated to fostering Atlanta’s startup ecosystem and has been instrumental in the growth of Tech Square Ventures through various initiatives.

Assets Under Management

Currently, the firm manages $90 million in assets. What started as a pilot fund, Tech Square Ventures Fund 1, with $5 million in investments, has expanded to include two larger funds.

These larger funds were raised in collaboration with prominent corporate partners such as AT&T, Chick-Fil-A, Cox Enterprises, Delta, Georgia-Pacific, Georgia Power, The Home Depot, UPS, Goldman Sachs, and Invesco, through a program called Engage. These funds collectively represent $54 million in AUM, and the firm is progressing towards closing a substantial second flagship fund, targeting $75 million.

A Blossoming Entrepreneurial Community

This activity is fostering a thriving entrepreneurial community that early-stage funds like Tech Square Ventures aim to support.

Corporate Spin-offs and Entrepreneurial Acceleration

“We are observing a growing number of individuals from these large corporations venturing out to launch their own businesses,” Kamath explained. “For over a decade, we’ve seen numerous entrepreneurs achieving success and an increasing pace of growth, climate development, and successful exits.”

Increased External Investment

More firms from outside the region are beginning to recognize Atlanta’s potential.

“This trend is emerging,” Kamath said. “While seed-stage investment often requires a local presence to support startups during their initial phases, once companies are vetted and secure early funding, we anticipate increased activity. We are already witnessing greater investment at the Series A and B levels from out-of-state investors. That is the prevailing strategy.”

Collaborative Startup Ecosystem

All indications point to a developing startup environment characterized by collaboration, which is expected to benefit not only Tech Square Ventures but also other early-stage funds like Atlanta Ventures, Outlander Labs, BLH Ventures, Knoll Ventures and Overline, all working to support the city’s entrepreneurs, Kamath concluded.