Invest Georgia, the state-funded investment program intended to spur economic and startup activity, has made its fourth allocation of $1.5 million into Engage Ventures. This follows Invest Georgia’s investments thus far in TTV Capital, Mosley Ventures and TechSquare Labs.
This deal is unique because Engage, which is managed by Tech Square Ventures, is not a traditional venture fund. Backed by 10 large enterprises and in partnership with Georgia Tech’s Advanced Technology Development Center (ATDC), the City of Atlanta, and the Atlanta Committee for Progress, the $15 million fund is more like a startup incubator program that educates and connects its portfolio companies with those corporations. The first eight companies in the inaugural cohort graduated last week with corporate partnerships, proofs of concepts and pilots resulting from their time in the program.
One startup pointed to a partnership with UPS, one of Engage’s corporate backers. Another mentioned a possible use case for the employees of some of the other founding companies. All the startups had access to high-level key decision-makers within these leading global brands.
According to Tech Square Ventures managing partner Blake Patton, Engage’s structure makes this latest partnership a “natural fit.”
“What early stage companies need most is access to markets and customers — and they also need access to capital to grow,” says Patton. “That’s what Engage is all about. We are excited to have Invest Georgia join us in making this the best place for early stage companies to get their products to market.”
Invest Georgia’s Executive Director Knox Massey also pointed to overall community growth, which is a key goal of the state-funded venture program.
“In a broader sense, this just represents more growth in the community, with companies, universities, and government coming together to push everything forward,” says Massey.
“We’re delighted to be working with Blake and his team at Engage Ventures. Invest Georgia is continuing our support of new and emerging fund managers in Georgia. Blake and his team have done a wonderful job of intertwining Georgia corporate investor support, the startup community and committed capital to make this new fund an initiative to be recognized throughout the SE region.”
Invest Georgia was instituted in 2013, and the initial $10 million to kick off the fund was allocated in 2015. The fund now manages $20 million; the legislature capped the allocation at up to $100 million. The overall aim of the program is to spur economic activity — job creation, startup growth, and entrepreneurship — in the state that was already ranked #2 for doing business by CNBC.
Funds are chosen carefully — in addition to Massey, Invest Georgia is steered by a Board of Directors and an investment consultancy firm. Funds that invest in industries traditionally strong in Georgia, like health IT, fintech, cybersecurity and SaaS, are favored as those with the highest chances of success.
Thus far, Massey estimates that from the current allocations the program has backed 36 Georgia-based companies and helped develop about 800 jobs in the state.
The partnership also makes sense given Atlanta Mayor Kasim Reed’s original impetus for initiating Engage.
“This new venture fund and accelerator program will offer an unmatched opportunity for entrepreneurs in Atlanta and the region, and I am confident its success will lead to greater interest and investment in our emerging technology companies,” Mayor Reed said in a statement.
After this investment, Invest Georgia still has over $10 million left to allocate from existing dollars. Massey says they intend to move fairly quickly; he’s hoping to close 2 more deals before the end of the year and another in Q1 of next year.
