Memphis, Tenn. (Dec. 18, 2019) – Following the sale of the Emerge Memphis building earlier this year, Emerge and Epicenter today announced an investment of $1.3 million in a fund to help local tech startups launch and scale.
The investment in Epicenter’s Formation Fund, an evergreen pre-seed investment fund, is intended to bolster early-stage support of high-tech startups.
“The entrepreneurial ecosystem in Memphis has expanded greatly in the last few years, but the one missing component has been sufficient investment capital to help establish and grow new companies in Memphis,” said Bryan M. Eagle, III, founder of Emerge Memphis. “Funding startups through Epicenter’s Formation Fund, especially home-grown ideas and those based on research from our local universities, was a natural fit because of Epicenter’s network, leadership, and, in partnership with Innova, expertise in venture financing.”
The Formation Fund is capitalized with unrestricted grant dollars and deployed as a critical economic development tool that allows for investment in riskier, pre-seed-stage deals, increasing quality teams into the startup development pipeline. The investment from Emerge Memphis into the fund increases the capital available to companies that launch through local accelerator programs and university commercialization programs, such as the Patents2Products partnership between the University of Memphis and Epicenter, as well as Christian Brothers University’s Center for Entrepreneurship + Innovation. It also complements and adds capacity to startup investments from early-stage funder Innova.
“This investment is an ideal outcome resulting from the evolution of a founding partner of the Memphis entrepreneurial community,” said Leslie Lynn Smith, president and CEO of Epicenter. “Intentionally and inclusively investing in early-stage ideas greatly increases the chances that dynamic, innovative startups will launch, grow, hire, and stay in the Memphis region. We believe that Memphis is investible, and we’re thrilled that early investments in Emerge and the local tech ecosystem have strategically come full circle.”
The Formation Fund encourages the formation of new companies that leverage the ecosystem and infrastructure of Memphis industry clusters around Logistics, Home Services, MedTech, and AgTech. By leading investments in startups in these sectors, as well as providing intensive wraparound services such as training and mentorship during this phase of development, Epicenter will greatly increase the likelihood of ultimate company success, thus de-risking the investment opportunity for future investors.
The Formation Fund is expected to invest in approximately 15 new companies each year, investing $50,000 on average in each company. Since its launch this year, $175,000 has been deployed to six startups, primarily through accelerator programs delivered in partnership with Start Co.
Emerge Memphis was the first tech startup support organization in Memphis, launched in 1999 by Eagle. The organization’s historic building at 516 Tennessee Street was renovated and opened as an incubator in 2002. In February, the building was sold to Anchor Investments, which plans to continue the building’s focus on high technology companies looking for a unique environment downtown.
As a nonprofit hub organization, Epicenter leads the Memphis region's connected and collaborative entrepreneurship movement. Using a systems approach, Epicenter drives strategy and measures impact among a network of economic development, academic, corporate, and government partners to increase support to new and existing tech startups, creative and community-based businesses, student entrepreneurs, and others across multiple industries and stages of growth. Epicenter and its partners connect these entrepreneurs and their innovative ideas to programming, capital, customers, and talent in order to create a just, inclusive, and growing economy that accrues to all Memphians. More information is available at epicentermemphis.org.
Emerge Memphis is 501(c)(3) organization established in 1999 to help early stage, growth-oriented technology-based companies in Memphis. Historically, it has provided incubation services to over 240 companies and helped to create over 750 direct jobs and over 3,200 indirect jobs in Memphis.