When talking about the caliber of investment groups looking to Nashville for deals, local investment manager Sid Chambless is happy to name drop.
GV, Google’s venture capital arm, Oak Investment Partners, Nasdaq, Goldman Sachs, Credit Suisse and BlueCross BlueShield Ventures are among the national or global companies and investment groups he rattles off that have poured millions into Nashville startups.
“We are having a great deal of success graduating companies to regional and national venture capital groups,” Chambless, director of Nashville Capital Network investment firm, said. “It used to be regional, that’s where the story has changed in the last couple of years.”
Nashville’s entrepreneurial community has gained significant support in recent years with the creation of the Nashville Entrepreneur Center, multiple new investment funds, the state’s $200 million TNInvestco initiative, Launch Tennessee’s programs and healthcare investment fund Jumpstart Foundry. While the city has generated many entrepreneurial success stories in past decades, it has gained momentum in recent years among sophisticated investment groups taking greater notice of the local activity.
In October, Nashville health care startup Aspire Health, a palliative care provider, raised $32 million in a deal led by GV. In 2014, Goldman Sachs and Credit Suisse led a $24 million investment round in Franklin-based cognitive computing company Digital Reasoning, which was followed by a $40 million round in 2016 led by Nasdaq and Lemhi Ventures. Chicago-based BlueCross BlueShield Venture Partners names at least six Nashville companies in its portfolio: Aspire Health, Axial Healthcare, Contessa Health, Change Healthcare, InVivoLink and NaviHealth.
The number of venture capital investments annually in Nashville has grown by 450 percent since 2009, compared to 140 percent nationally, with more than $150 million invested, according to the Nashville Capital Network’s annual report. The number of growth capital deals, those that are greater than $3 million, has increased by 170 percent.
Aspire Health CEO Brad Smith was introduced to a GV investor in April at a health care conference in California by Ann Lamont, Oak Investment Partners managing partner and an Aspire board member. Aspire, which brings doctors and nurse practitioners to patients’ homes, had raised $2 million from Nashville investors before landing much larger rounds from BlueCross BlueShield and Oak, based in Connecticut and Palo Alto, California. While Smith’s team had not planned on raising more capital for another six months, they were eager to gain GV’s backing.
“Technology is a really important part of our business, both in terms of how we identify patients, how we track our visits and our phone calls and how we figure out what types of interactions with patients are the most helpful to them,” Smith said. “The idea of being able to partner with them and improve our algorithm and our data science and our technology was really appealing.”