Nashville’s startup scene is booming as health-tech investors and founders flock to the Music City
Nashville’s startup scene is booming as health-tech investors and founders flock to the Music City

Tourists go to the bars and nation music venues in the Lower Broadway leisure district in Nashville, Tennessee, Sept. 1, 2019.

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On a flight from Fort Lauderdale, Florida, to Nashville, Tennessee, earlier this month, 36-year-old Robin Shah settled into his seat and ready to crank out some work for his health-tech startup, Thyme Care. 

Founded in 2020, Thyme Care helps most cancers sufferers handle their illness by connecting them with the personalised care and sources they want. Shah, the co-founder and CEO, sports activities a purple Thyme Care sticker on his water bottle, and it caught the eye of the enterprise capitalist sitting subsequent to him on the airplane.

The VC acknowledged Shah’s firm — an incidence that is hardly uncommon for him anymore. As extra investors and founders are flocking to discover Nashville’s booming health-care and know-how scene, Shah mentioned he will get acknowledged repeatedly. Sometimes folks know his first and final names. 

“It occurs most likely each two or three flights,” Shah instructed CNBC in an interview.   

Nashville is dwelling to greater than 680,000 people, together with Shah, who love the metropolis for its Southern appeal and small-town vibe. But whereas the group would possibly really feel quaint, Nashville is a titan of the health-care business. The metropolis helps greater than 900 health-care corporations that generate a complete of $97 billion in income annually, in accordance to the Nashville Health Care Council.

As a outcome, the metropolis is bursting with alternatives for founders such as Shah who’re searching for methods to disrupt the business and redefine the affected person expertise.

CNBC spoke with a dozen founders, investors and executives in Nashville who described a tight-knit, supportive health-tech group that is rising bigger by the day. 

“Great corporations are being born right here,” Shah mentioned. 

Nashville’s historical past with well being care

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Nicknamed Music City, Nashville is chock-full of nation singers and perpetually buzzing with reside music. It has additionally turn out to be a preferred vacation spot for bachelorette parties, so teams of ladies, typically donning pink or bedazzled cowboy hats, could be seen wandering in and out of bars on the widespread avenue known as Broadway. 

But simply minutes away from the occasion vibe on Broadway lies Nashville’s vibrant community of well being techniques, startups and funding corporations. 

The metropolis’s fame as a health-care hub was catalyzed when HCA Healthcare, one in every of the first for-profit hospital corporations in the U.S., was based there in 1968. HCA operates greater than 180 hospitals throughout 20 states and facilitates greater than 37 million affected person encounters annually, in accordance to its web site.

The firm has helped appeal to troves of health-care professionals to Nashville, and different organizations shortly adopted go well with. 

Community Health Systems, which operates 74 acute-care hospitals, Brookdale Senior Living, which runs greater than 670 senior residing communities, and Acadia Healthcare, which operates greater than 250 behavioral well being amenities, are all headquartered in the better Nashville space. 

Prominent larger training establishments such as Vanderbilt University, together with the Vanderbilt University Medical Center; Belmont University; and Meharry Medical College are additionally based mostly in Nashville.  

“Fundamentally, Nashville is type of the health-care capital of the world. That’s how we describe ourselves typically,” Kyle Cooksey, chief expertise officer at Monogram Health, instructed CNBC.

Monogram Health, headquartered in a Nashville suburb, gives digital instruments that may assist sufferers with circumstances such as continual kidney illness handle their care from dwelling. The firm closed a $375 million progress funding spherical in January, and former Senate Majority Leader Bill Frist serves as chairman of the board.  

Cooksey mentioned the Nashville startup ecosystem is “extremely supportive” and mission-driven, and now so entrenched in the metropolis that it is arduous to miss.  

 “You cannot actually go a block right here with out stumbling throughout a health-care firm,” he mentioned.

Downtown Nashville, Tennessee.

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As a outcome, health-care expertise and experience is plentiful in Nashville, which is a considerable perk for founders constructing corporations there.  

John Bass, a Nashville native and the CEO of a enterprise studio known as Hashed Health, mentioned the metropolis is such a “extremely concentrated” atmosphere of health-care professionals that it may be arduous to depart. He based Hashed Health, which goals to de-risk and spin out health-care startups, in 2016.

Bass mentioned VCs in Nashville have a tendency to take a practical and conservative strategy to investing, which displays the difficult actuality of constructing options for the historically technology-averse health-care business. He mentioned innovation on this house requires a cautious understanding of rules and constraints.

Bass mentioned he is thought of buying and selling in Music City for the Rocky Mountains in Colorado however that he is glad he stayed.

“Moving to a distinct metropolis could be enjoyable, however I do not assume some other city has that very same degree of concentrated expertise that Nashville has,” Bass instructed CNBC in an interview. “It nonetheless feels prefer it’s the proper measurement, it hasn’t grown so large that it is too diluted.”

Ellen Herlacher, a accomplice at the health-care VC agency LRVHealth, grew up in Nashville and lives in Boston. She mentioned Boston is a powerful metropolis for each tutorial and scientific innovation in well being care, however Nashville is the middle of the health-care enterprise. 

Herlacher travels to Nashville each six to eight weeks to meet with portfolio corporations and co-investors. Sometimes she makes the journey two weeks in a row. 

Luke Benda, co-founder and CEO of the Nashville-based medical robotics firm Healing Innovations, mentioned the metropolis offers founders quick access to the “heavy hitters” of hospital operations, which could be troublesome to attain, not to mention rent, from elsewhere. 

However, he mentioned startups additionally want conventional technologists such as software program builders and engineers, which could be tougher to discover in Nashville.   

The broader tech expertise pool has improved in recent times as tech corporations such as Amazon and Oracle have established hubs in Nashville, however Bass mentioned it is nonetheless not at all times straightforward to discover true technologists.

Amazon announced it might construct an expansive new workplace house in Nashville in 2018 and promised to convey greater than 5,000 company and know-how jobs to the metropolis. Oracle, which accomplished a deal to purchase the digital medical data firm Cerner in 2022, is constructing its second U.S. headquarters in Nashville for $1.2 billion, in accordance to The Tennessean

“It’s nonetheless the actuality that you simply’re most likely not going to discover every part you want right here,” Bass mentioned.

Support for Nashville entrepreneurs

The Regions Bank constructing looms behind a neon signal over the entrance to a Nashville, Tennessee, bar and reside nation music venue in the metropolis’s Lower Broadway leisure district, Sept. 2, 2019.

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Nashville’s health-tech startup scene has additionally benefited from vital funding from native organizers and authorities officers. 

In November, the Greater Nashville Venture Capital Association, or GNVCA, formally launched. The group is membership-based and goals to make capital and expertise extra broadly obtainable to investors in the area by attracting new VCs, organizing networking occasions and sourcing funding alternatives. 

Vanderbilt offered a grant to help the GNVCA’s preliminary operations, in accordance to a blog post

The GNVCA was ready to launch partly as a result of a “crucial mass” of VC corporations have now arrange store in Nashville, mentioned Marcus Whitney, a member of GNVCA’s board and a co-founder and accomplice of the agency Jumpstart Health Investors. 

Whitney has lived in Nashville for greater than 20 years, however he mentioned the VC and startup ecosystem has modified “drastically” in the final 5 years. He mentioned the metropolis is attracting new residents from enterprise hubs on each coasts, together with founders, VCs and funding bankers.

“We look much more like a tech and innovation hub than we did 10 years in the past, that is for certain,” he instructed CNBC in an interview. 

Nashville is additionally dwelling to the Nashville Entrepreneur Center, which helps join startups with the sources and help they want. The middle opened its flagship facility in 2010 after the Nashville Area Chamber of Commerce commissioned a 75-person “Entrepreneurship Task Force” in 2007. It has labored with greater than 10,000 entrepreneurs since 2010, in accordance to its web site. 

Benda mentioned the Entrepreneur Center is an “superb hub” stuffed with mentors who need to assist founders, even when the founders do not know what they’re doing. Landon Gibbs, managing accomplice at Nashville-based Altitude Ventures, mentioned the middle is the “entrance door” for entrepreneurship in the metropolis.

“The group is actually behind that,” Gibbs mentioned. 

Eligible Nashville entrepreneurs also can turn out to be members of the Greater Nashville Technology Council and the Nashville Health Care Council. The Nashville Health Care Council is made up of greater than 300 corporations, together with HCA Healthcare, and it gives networking alternatives and academic occasions. 

Raelyn Wilson, co-founder and CEO of Nashville-based Peer Supply, mentioned there are “fixed” social occasions for the startup group in Nashville, together with many which can be very informal. Peer Supply, a platform that helps to enhance health-care provide chains, is Wilson’s first enterprise as a founder. 

“I can not inform you how typically folks need to seize espresso or seize a glass of wine or one thing simply to speak about the business and share classes realized,” Wilson instructed CNBC in an interview.

A powerful group really feel

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Beyond the sensible enterprise benefits, many health-tech founders and investors have discovered that Nashville is merely a enjoyable place to reside and increase a household. 

Live music is ubiquitous in the metropolis, and Tennessee has no state revenue tax, which Whitney mentioned is enticing to many residents. Whitney helped convey skilled soccer to Nashville, and Tennessee is dwelling to skilled soccer, hockey and basketball groups as nicely.

“We have, I feel, all the issues that you’d need from a metropolis, however most likely slightly bit extra group than perhaps a few of the extra aggressive tier-one cities have,” he mentioned. 

However, Whitney mentioned there is nonetheless “lots of work to do” to enhance the training system in Nashville. Tennessee ranks thirty third in training in the U.S., in accordance to U.S. News & World Report. He mentioned infrastructure can even have to maintain tempo with the metropolis as it grows, as he is already noticing extra visitors.

Herlacher of LRVHealth mentioned Nashville is nonetheless comparatively accessible and straightforward to navigate, including that there is a lot much less visitors in contrast with cities such as Boston and San Francisco.

“It’s not arduous to depart work, drive quarter-hour, shortly seize a drink with someone and then be at dwelling for dinner at 6:30 p.m.,” she mentioned.

Herlacher mentioned Nashville is nearly “unrecognizable” from when she grew up there. But regardless of all the change, she says, range is nonetheless a problem. She mentioned it is much less widespread to discover ladies in entrepreneurship there, for example.

Rachel Soper Sanders, co-founder and CEO of the personalised complement firm Rootine, has noticed this disparity firsthand. Sanders attended Vanderbilt and moved again to Nashville when she determined to construct Rootine. She mentioned it is nonetheless uncommon to discover feminine founders, and particularly venture-backed feminine founders, in the metropolis. 

Even so, she mentioned she has discovered a close-knit, supportive startup ecosystem in Nashville that has continued to blossom as it grows.

“There’s this new feeling, pleasure, power, the place Nashville is not simply Nashville anymore, it isn’t simply the Southeast, however it’s linked to all over the place else,” she instructed CNBC in an interview.

Thyme Care’s Shah mentioned Nashville is very welcoming to newcomers, and he discovered that the health-tech group embraced him instantly. It was surprisingly straightforward for him to regulate after transferring from New York greater than 5 years in the past, he mentioned. 

The week he arrived in Nashville, Shah mentioned, he met an entrepreneur in the business who launched him to 30 health-care executives in 24 hours. 

“Within two months, I went and met all these folks, and everybody was so welcoming to me,” he mentioned. “There’s a lot alternative to study from one another.”

Bass of Hashed Health mentioned there is a “sturdy group really feel” amongst entrepreneurs and VCs in Nashville. It’s not unusual to run into friends and colleagues at eating places, cafes or back-to-school nights.

“I simply got here from my neighborhood espresso store, and I most likely noticed three folks I knew that reside in the neighborhood, and they’re in well being care, or tech or enterprise capital,” Bass mentioned. “It’s nearly a each day factor.”

In some circumstances, Nashville’s health-tech group could be supportive to a fault. 

Chase Spurlock, co-founder and CEO of Decode Health, mentioned folks can expertise a phenomenon identified as the “Nashville no,” the place they’re instructed “perhaps” indefinitely. He mentioned it is a mirrored image of the metropolis’s Southern roots and need not to be too adverse. 

Decode Health is an information platform designed to assist pharmaceutical, diagnostic and know-how corporations determine new biomarkers and construct new scientific determination help instruments. Spurlock, a Tennessee native, based the firm in Nashville in 2019.  

Spurlock mentioned he is “proud” that he has been ready to keep in the space. He mentioned there is a real need to see entrepreneurs and know-how achieve Nashville, and that the group is dedicated to paying it ahead.   

“I’ve by no means wanted assist and not acquired assist in the Nashville group,” Spurlock instructed CNBC. “That’s, I feel, what actually makes us particular.”

TUNE IN: The “Cities of Success” particular that includes Nashville will air on CNBC on Dec. 6 at 10 p.m. ET.

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