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Vacationers go to the bars and nation music venues within the Decrease 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.Â
Based in 2020, Thyme Care helps most cancers sufferers handle their illness by connecting them with the customized 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 attention of the enterprise capitalist sitting subsequent to him on the aircraft.
The VC acknowledged Shah’s firm — an prevalence that’s hardly uncommon for him anymore. As extra traders and founders are flocking to discover Nashville’s booming health-care and know-how scene, Shah mentioned he will get acknowledged frequently. Generally folks know his first and final names.Â
“It occurs in all probability each two or three flights,” Shah informed CNBC in an interview.  Â
Nashville is house to greater than 680,000 folks, together with Shah, who love town for its Southern attraction and small-town vibe. However whereas the neighborhood may really feel quaint, Nashville is a titan of the health-care business. The town helps greater than 900 health-care corporations that generate a complete of $97 billion in income annually, in keeping with the Nashville Well being Care Council.
Because of this, town is bursting with alternatives for founders resembling Shah who’re on the lookout for methods to disrupt the business and redefine the affected person expertise.
CNBC spoke with a dozen founders, traders and executives in Nashville who described a tight-knit, supportive health-tech neighborhood that is rising bigger by the day.Â
“Nice corporations are being born right here,” Shah mentioned.Â
Nashville’s historical past with well being care
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Nicknamed Music Metropolis, Nashville is chock-full of nation singers and perpetually buzzing with reside music. It has additionally turn out to be a well-liked vacation spot for bachelorette events, so teams of girls, usually donning pink or bedazzled cowboy hats, may be seen wandering out and in of bars on the favored avenue known as Broadway.Â
However simply minutes away from the celebration vibe on Broadway lies Nashville’s vibrant community of well being methods, startups and funding corporations.Â
The town’s fame as a health-care hub was catalyzed when HCA Healthcare, one of many first for-profit hospital corporations within 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 keeping with its web site.
The corporate has helped appeal to troves of health-care professionals to Nashville, and different organizations shortly adopted swimsuit.Â
Neighborhood Well being Programs, which operates 74 acute-care hospitals, Brookdale Senior Dwelling, which runs greater than 670 senior dwelling communities, and Acadia Healthcare, which operates greater than 250 behavioral well being amenities, are all headquartered within the higher Nashville space.Â
Distinguished increased schooling establishments resembling Vanderbilt College, together with the Vanderbilt College Medical Heart; Belmont College; and Meharry Medical School are additionally based mostly in Nashville. Â
“Essentially, Nashville is kind of the health-care capital of the world. That is how we describe ourselves usually,” Kyle Cooksey, chief expertise officer at Monogram Well being, informed CNBC.
Monogram Well being, headquartered in a Nashville suburb, provides digital instruments that may assist sufferers with circumstances resembling power kidney illness handle their care from house. The corporate closed a $375 million development funding spherical in January, and former Senate Majority Chief Invoice Frist serves as chairman of the board. Â
Cooksey mentioned the Nashville startup ecosystem is “extremely supportive” and mission-driven, and now so entrenched within the metropolis that it is laborious to overlook. Â
 “You may’t actually go a block right here with out stumbling throughout a health-care firm,” he mentioned.
Downtown Nashville, Tennessee.
Kruck20 | Istock | Getty Pictures
Because of this, health-care expertise and experience is plentiful in Nashville, which is a considerable perk for founders constructing corporations there. Â
John Bass, a Nashville native and the CEO of a enterprise studio known as Hashed Well being, mentioned town is such a “extremely concentrated” surroundings of health-care professionals that it may be laborious to depart. He based Hashed Well being, which goals to de-risk and spin out health-care startups, in 2016.
Bass mentioned VCs in Nashville are likely 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 area requires a cautious understanding of laws and constraints.
Bass mentioned he is thought of buying and selling in Music Metropolis for the Rocky Mountains in Colorado however that he is glad he stayed.
“Transferring to a special metropolis could be enjoyable, however I do not assume every other city has that very same stage of concentrated expertise that Nashville has,” Bass informed CNBC in an interview. “It nonetheless feels prefer it’s the correct dimension, it hasn’t grown so huge that it is too diluted.”
Ellen Herlacher, a companion on the health-care VC agency LRVHealth, grew up in Nashville and lives in Boston. She mentioned Boston is a robust metropolis for each tutorial and scientific innovation in well being care, however Nashville is the middle of the health-care enterprise.Â
Herlacher travels to Nashville each six to eight weeks to fulfill with portfolio corporations and co-investors. Generally she makes the journey two weeks in a row.Â
Luke Benda, co-founder and CEO of the Nashville-based medical robotics firm Therapeutic Improvements, mentioned town offers founders easy accessibility to the “heavy hitters” of hospital operations, which may be tough to achieve, not to mention rent, from elsewhere.Â
Nevertheless, he mentioned startups additionally want conventional technologists resembling software program builders and engineers, which may be more durable to seek out in Nashville.  Â
The broader tech expertise pool has improved lately as tech corporations resembling Amazon and Oracle have established hubs in Nashville, however Bass mentioned it is nonetheless not at all times simple to seek out true technologists.
Amazon introduced it could construct an expansive new workplace area in Nashville in 2018 and promised to deliver greater than 5,000 company and know-how jobs to town. Oracle, which accomplished a deal to purchase the digital medical information firm Cerner in 2022, is constructing its second U.S. headquarters in Nashville for $1.2 billion, in keeping with The Tennessean.Â
“It is nonetheless the fact that you simply’re in all probability not going to seek out the whole lot you want right here,” Bass mentioned.
Help for Nashville entrepreneurs
The Areas Financial institution constructing looms behind a neon signal over the doorway to a Nashville, Tennessee, bar and reside nation music venue within the metropolis’s Decrease Broadway leisure district, Sept. 2, 2019.
Robert Alexander | Archive Pictures | Getty Pictures
Nashville’s health-tech startup scene has additionally benefited from important funding from native organizers and authorities officers.Â
In November, the Better Nashville Enterprise Capital Affiliation, or GNVCA, formally launched. The group is membership-based and goals to make capital and expertise extra extensively obtainable to traders within the area by attracting new VCs, organizing networking occasions and sourcing funding alternatives.Â
Vanderbilt offered a grant to help the GNVCA’s preliminary operations, in keeping with a weblog publish.Â
The GNVCA was in a position to launch partly as a result of a “important mass” of VC corporations have now arrange store in Nashville, mentioned Marcus Whitney, a member of GNVCA’s board and a co-founder and companion of the agency Jumpstart Well being Traders.Â
Whitney has lived in Nashville for greater than twenty years, however he mentioned the VC and startup ecosystem has modified “drastically” within the final 5 years. He mentioned town is attracting new residents from enterprise hubs on each coasts, together with founders, VCs and funding bankers.
“We glance much more like a tech and innovation hub than we did 10 years in the past, that is for certain,” he informed CNBC in an interview.Â
Nashville can be house to the Nashville Entrepreneur Heart, which helps join startups with the sources and help they want. The middle opened its flagship facility in 2010 after the Nashville Space Chamber of Commerce commissioned a 75-person “Entrepreneurship Process Drive” in 2007. It has labored with greater than 10,000 entrepreneurs since 2010, in keeping with its web site.Â
Benda mentioned the Entrepreneur Heart is an “wonderful hub” filled with mentors who need to assist founders, even when the founders do not know what they’re doing. Landon Gibbs, managing companion at Nashville-based Altitude Ventures, mentioned the middle is the “entrance door” for entrepreneurship within the metropolis.
“The neighborhood is basically behind that,” Gibbs mentioned.Â
Eligible Nashville entrepreneurs may turn out to be members of the Better Nashville Know-how Council and the Nashville Well being Care Council. The Nashville Well being Care Council is made up of greater than 300 corporations, together with HCA Healthcare, and it provides networking alternatives and academic occasions.Â
Raelyn Wilson, co-founder and CEO of Nashville-based Peer Provide, mentioned there are “fixed” social occasions for the startup neighborhood in Nashville, together with many which can be very informal. Peer Provide, a platform that helps to enhance health-care provide chains, is Wilson’s first enterprise as a founder.Â
“I am unable to inform you how usually folks need to seize espresso or seize a glass of wine or one thing simply to speak concerning the business and share classes realized,” Wilson informed CNBC in an interview.
A robust neighborhood really feel
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Past the sensible enterprise benefits, many health-tech founders and traders have discovered that Nashville is just a enjoyable place to reside and lift a household.Â
Reside music is ubiquitous within the metropolis, and Tennessee has no state earnings tax, which Whitney mentioned is engaging to many residents. Whitney helped deliver skilled soccer to Nashville, and Tennessee is house to skilled soccer, hockey and basketball groups as effectively.
“Now we have, I believe, all of the issues that you’d need from a metropolis, however in all probability somewhat bit extra neighborhood than possibly among the extra aggressive tier-one cities have,” he mentioned.Â
Nevertheless, Whitney mentioned there’s nonetheless “a number of work to do” to enhance the schooling system in Nashville. Tennessee ranks thirty third in schooling within the U.S., in keeping with U.S. Information & World Report. He mentioned infrastructure will even should preserve tempo with town because it grows, as he’s already noticing extra visitors.
Herlacher of LRVHealth mentioned Nashville continues to be comparatively accessible and simple to navigate, including that there’s a lot much less visitors in contrast with cities resembling Boston and San Francisco.
“It is not laborious to depart work, drive quarter-hour, shortly seize a drink with someone after which be at house for dinner at 6:30 p.m.,” she mentioned.
Herlacher mentioned Nashville is sort of “unrecognizable” from when she grew up there. However regardless of all of the change, she says, range continues to be a problem. She mentioned it’s much less frequent to seek out ladies in entrepreneurship there, as an example.
Rachel Soper Sanders, co-founder and CEO of the customized 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’s nonetheless uncommon to seek out feminine founders, and particularly venture-backed feminine founders, within the metropolis.Â
Even so, she mentioned she has discovered a close-knit, supportive startup ecosystem in Nashville that has continued to blossom because it grows.
“There’s this new feeling, pleasure, power, the place Nashville is not only Nashville anymore, it is not simply the Southeast, nevertheless it’s related to in all places else,” she informed CNBC in an interview.
Thyme Care’s Shah mentioned Nashville could be very welcoming to newcomers, and he discovered that the health-tech neighborhood embraced him instantly. It was surprisingly simple for him to regulate after shifting from New York greater than 5 years in the past, he mentioned.Â
The week he arrived in Nashville, Shah mentioned, he met an entrepreneur within the business who launched him to 30 health-care executives in 24 hours.Â
“Inside two months, I went and met all these folks, and everybody was so welcoming to me,” he mentioned. “There’s a lot alternative to be taught from one another.”
Bass of Hashed Well being mentioned there’s a “sturdy neighborhood really feel” amongst entrepreneurs and VCs in Nashville. It is 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 in all probability noticed three folks I knew that reside within the neighborhood, and so they’re in well being care, or tech or enterprise capital,” Bass mentioned. “It is nearly a each day factor.”
In some circumstances, Nashville’s health-tech neighborhood may be supportive to a fault.Â
Chase Spurlock, co-founder and CEO of Decode Well being, mentioned folks can expertise a phenomenon often called the “Nashville no,” the place they’re informed “possibly” indefinitely. He mentioned it’s a reflection of town’s Southern roots and need to not be too adverse.Â
Decode Well being 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 corporate in Nashville in 2019. Â
Spurlock mentioned he is “proud” that he has been in a position to keep within the space. He mentioned there’s a real need to see entrepreneurs and know-how achieve Nashville, and that the neighborhood is dedicated to paying it ahead.  Â
“I’ve by no means wanted assist and never acquired assist in the Nashville neighborhood,” Spurlock informed CNBC. “That is, I believe, what actually makes us particular.”
TUNE IN:Â The “Cities of Success” particular that includes Nashville will air on CNBC on Dec. 6 at 10 p.m. ET.
