Why B2B Startups Flourish in Atlanta

While the world’s eyes are often on Silicon Valley for the latest innovations and most groundbreaking startups, one unexpected city is emerging in the US as the new startup capital, with breeding grounds perfect for new B2B companies: Atlanta.

According to reports, venture capitalists have funded Atlanta startups with $1.2 billon in financial support over the last five years. In 2014 alone, investors more than tripled their $110 million in funding recorded in 2010, and the annual deal count grew by more than 25 percent.

B2B starts up in city are attracting particular attention. According to Atlanta-based venture capital firm TechOperators, which closed five deals for B2B startups in the city, business-to-business is what Atlanta is best known for among the startup community.

“That’s what this region is best known for – sales, marketing tech, payments, cybersecurity, to name a few,” said TechOperators partner Glen McGonnigle. “It’s a historical strength.”

Reports note that the city is home to the sixth-most concentrated area for Fortune 500 companies in the nation. According to venture capitalists, that means some of the largest brands in the world will hold discussions about raising capital for startups.

With more affordable living than some other high-tech and startup-rich cities, reports say Atlanta offers prime conditions for supporting startup growth and innovation. “For the right kind of deals and the right teams, West Coast VCs have been coming here for a long time,” McGonnigle said. “But what’s changed is that now we have a very vibrant ecosystem and talent, and increasingly we have local capital.”

In addition to TechOperators, other leading investors for Atlanta-based startups include BIP Capital, BLH Venture Partners and Imlay Investments. Reports say nine of the 10 most active investors in the region are local.

Most recently, cybersecurity startup Pindrop secured $35 million in series B funding just weeks ago.