Jan 18, 2025

Look Ahead: Venture capitalists bet big on Jacksonville’s emerging startup scene

By Carter Mudgett – Reporter, Jacksonville Business Journal

Jacksonville’s tech scene is gaining momentum, and two of the region’s top venture capital leaders are already looking ahead to what’s ahead for 2025.

Jim Stallings of PS27 Ventures and Charlie Banks of Venture South, who lead two of the largest VC funds on the First Coast, told the Business Journal 2025 will be a pivotal year for the city’s growing technology ecosystem. Their message: Jacksonville is emerging as a serious contender in the tech space, and the pieces are falling into place for the city to capitalize on its upward trajectory.

Technology ecosystems need three things to work, according to Stallings: a university network to train entrepreneurs, a venture capital community and big companies bought into the concept of local innovation.

“The most important thing for us is to have a successful company; a big exit,” Stallings said. “When you say, I’m a startup ecosystem, it’s like a university. You say, okay, who are your graduates? Who are your Nobel Peace Prize winners? Over the next three, four, five years, we’ve got to have the next Fanatics.”

That education component is key, according to Banks, as Jacksonville founders need both the university network and companies invested in their future, monetarily and literally.

“If you have an educated founder base that couples with really innovative founders that have the ability to raise capital, that’s a great thing,” he said. “On the other end of the coin, Jacksonville continues to have a need to have a focus on educating the high net worth accredited investors within the region. Not only on the importance of investing in the founders in Jacksonville but that it’s a legitimate way to make positive returns.”

A driver of why Venture South broke into the Jacksonville market in the first case was because it foresaw the city as a “burgeoning ecosystem” it wanted to have a slice of. That’s a trend that Banks said people from Orlando and other cities are taking notice of as well. But while Jacksonville has potential, it’s not there quite yet.

One thing that needs to ramp up to a larger scale is the relocation of specifically successful technology companies that make money and create jobs by hiring more and more people, Stallings said.

“I’m not talking about moving a big industrial out of the Northeast, where there’s a high tax base to a low tax base,” he said. “I’m talking about people saying, I’m not going to do this in San Francisco. I can’t afford it. I’m going to move this to Jacksonville, because I got access to talent money in Jacksonville.”

Regardless, both venture capital fund leaders see great opportunity in 2025.

“You’ll see a lot of companies again that have been on the sidelines with their acquisition strategies,” he said. “I think that’s going to start to loosen up, which is a good thing for not only our portfolio, but for any founders that have companies that are looking to be acquired by larger ones, whether it be competitors or industry partners.”

For PS27 Ventures, the company plans to do more investing in 2025 because macro-economic factors are improving, and it foresees its “best year ever.”

“Inflation is down, interest rates are going down,” said Stallings. The impact of that is you will find deal making and distributions, either through public offerings or large companies, medium and large companies merging and that way investors are getting a distribution. And when investors get a distribution, they get a payday. That money goes back into circulation. There’s more investing. And when there’s more investing and more capital, there’s more innovation.”

“As folks start realizing the caliber of technologies that are spinning out of Jacksonville and the rest of the southeast, a lot of investors have latent capital and sidelines that are looking to put into play. And now is the time to do it,” Banks said. “From a capital availability standpoint, you’re going to see a lot of folks that are outside the region start paying a lot more attention to the southeast and Jacksonville particularly.”

Read the full article from the Jacksonville Business Journal.

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