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Birmingham

An industrial and railroad hub due to its central location in the Deep South, Birmingham has recently emerged as a regional startup hub. Millennials have been flocking to the city, attracted by its downtown renaissance, foodie reputation, and the openness of the local startup community. The epicenter of this community is Innovation Depot, an incubator, accelerator, and co-working space, home to over 100 companies providing over 800 jobs for entrepreneurs. Organizations such as the Birmingham Business Alliance, TechBirmingham, and REV Birmingham have been integral in promoting tech companies in the region and in the redevelopment of the downtown area. Historically, the region has been a life sciences magnet, home to 119 biotech companies with more than $2 billion in research grants and venture capital investments in health IT. In addition to a robust healthcare IT sector, the region is primed for successful fintech and cybersecurity startups due to strengths in those areas as well. Despite all these strengths, Birmingham faces a similar set of challenges that other growing communities face, namely access to early stage capital; although the Velocity Seed Fund and other early stage capital sources have been making significant impact in this area.

In This Market

These businesses offer industry expertise and are a source of startup talent and potential customers. They help fuel the local startup community.

Opportunities

  • A central location within the Deep South, with an enviable quality of life, Birmingham has an excellent foodie reputation, beautiful scenery, and plenty of sights for history buffs.
  • Innovation Depot serves as the epicenter of the community. Member companies have gone on to raise millions in venture funding after participating in the accelerator program, and its bootcamp (Depot/U) serves as a major talent pipeline for the local community, with 95% of participants receiving a job soon after graduation.
  • The region is a life sciences magnet, home to 119 biotech companies with more than $2 billion in research grants and venture capital investments in health IT.
  • REV Birmingham has been leading an initiative to revitalize the downtown area, which will bring in thousands of talented people into the city.
  • The openness and support that newcomers get from such a close-knit community is extremely attractive, especially when compared to the overwhelming size of communities in New York and Silicon Valley.
  • Promising verticals include healthcare IT, fintech, and cybersecurity.

Risk Factors

  • While there is a relatively active angel investing community, it is not organized nor has it coalesced around a unifying entity.
  • Birmingham still suffers from negative PR that makes recruiting a bit more challenging, however this is just beginning to change as the downtown area is being redeveloped and more people move to the city.
  • There is no regional unified government, and this leads to a lot of duplication of efforts. Additionally, the public school system leaves a lot to be desired.
  • The lack of a local billion dollar startup exit, or “unicorn”, makes it challenging for the community to be validated.
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