Nashville’s heath tech startup scene is booming. Here is why.

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 well being tech startup, Thyme Care. 

Based in 2020, Thyme Care helps most cancers sufferers handle their illness by connecting them with the customized care and assets 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 incidence that’s hardly uncommon for him anymore. As extra traders and founders are flocking to discover Nashville’s booming well being care and know-how scene, Shah stated he will get acknowledged commonly. Typically folks know his first and final names. 

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

Nashville is residence to greater than 680,000 folks, together with Shah, who love town for its southern appeal and small-town vibe. However whereas the neighborhood would possibly really feel quaint, Nashville is a titan of the health-care trade. Town helps greater than 900 health-care firms that generate a complete of $97 billion in income annually, in response to the Nashville Well being Care Council.

In consequence, town is bursting with alternatives for founders like Shah who’re on the lookout for methods to disrupt the trade and redefine the affected person expertise.

CNBC spoke with a dozen founders, traders and executives in Nashville who described a tight-knit, supportive well being tech neighborhood that is rising bigger by the day. 

“Nice firms are being born right here,” Shah stated. 

Nicknamed “Music Metropolis,” Nashville is chock-full of nation singers and perpetually buzzing with dwell music. It has additionally change into a well-liked vacation spot for bachelorette events, so teams of girls, usually donning pink or bedazzled cowboy hats, will be seen wandering out and in of bars on the favored avenue known as Broadway. 

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

Town’s status as a health-care hub was catalyzed when HCA Healthcare, one of many first for-profit hospital firms 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 response to its web site.

The corporate has helped appeal to troves of health-care professionals to Nashville, and different organizations rapidly adopted swimsuit. 

Neighborhood Well being Techniques, which operates 74 acute care hospitals, Brookdale Senior Residing, which runs greater than 670 senior residing communities, and Acadia Healthcare, which operates greater than 250 behavioral well being amenities, are all headquartered within the better Nashville space. 

Distinguished greater schooling establishments like Vanderbilt College, together with the Vanderbilt College Medical Heart, Belmont College, and Meharry Medical Faculty are additionally primarily based in Nashville.  

“Essentially, Nashville is type of the healthcare capital of the world. That is how we describe ourselves usually,” Kyle Cooksey, chief expertise officer at Monogram Well being, instructed CNBC.

Monogram Well being, headquartered in a Nashville suburb, gives digital instruments that may assist sufferers with circumstances like persistent kidney illness handle their care from residence. The corporate closed a $375 million development funding spherical in January, and former Senate Majority Chief Invoice Frist serves as chairman of the board.  

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

 “You’ll be able to’t actually go a block right here with out stumbling throughout a health-care firm,” he stated.

In consequence, health-care expertise and experience is plentiful in Nashville, which is a considerable perk for founders constructing firms there.  

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

Bass stated VCs in Nashville are likely to take a realistic and conservative strategy to investing, which displays the difficult actuality of constructing options for the historically technology-averse well being care trade. He stated innovation on this area requires a cautious understanding of laws and constraints.

Bass has thought-about buying and selling in Music Metropolis for the Rocky Mountains in Colorado, however he stated he’s glad he stayed.

“Shifting to a distinct metropolis can be enjoyable, however I do not suppose every other city has that very same stage of concentrated expertise that Nashville has,” Bass instructed CNBC in an interview. “It nonetheless feels prefer it’s the suitable measurement, it hasn’t grown so massive that it is too diluted.”

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

Herlacher travels to Nashville each six to eight weeks to fulfill with portfolio firms and co-investors. Typically she makes the journey two weeks in a row. 

Luke Benda, co-founder and CEO of the Nashville-based medical robotics firm Therapeutic Improvements, stated town provides founders quick access to the “heavy hitters” of hospital operations, which will be troublesome to succeed in, not to mention rent, from elsewhere. 

Nonetheless, he stated startups additionally want conventional technologists like software program builders and engineers, which will be more durable to seek out in Nashville.   

The broader tech expertise pool has improved lately as tech firms like Amazon and Oracle have established hubs in Nashville, however Bass stated it is nonetheless not all the time straightforward to seek out true technologists.

Amazon introduced it could construct an expansive new workplace area in Nashville in 2018 and promised to convey greater than 5,000 company and know-how jobs to town. Oracle, which accomplished a deal to purchase the digital medical information firm Cerner final yr, is constructing its second U.S. headquarters in Nashville for $1.2 billion, in response to The Tennessean. 

“It is nonetheless the truth that you just’re most likely not going to seek out all the things you want right here,” Bass stated.

Nashville’s well being tech startup scene has additionally benefited from important funding from native organizers and authorities officers. 

In November, the Better Nashville Enterprise Capital Affiliation (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. 

Vanderbilt supplied a grant to assist the GNVCA’s preliminary operations, in response to a weblog publish. 

The GNVCA was capable of launch partly as a result of a “essential mass” of VC corporations have now arrange store in Nashville, stated Marcus Whitney, a member of GNVCA’s board and a co-founder and accomplice of the agency Jumpstart Well being Traders. 

Whitney has lived in Nashville for greater than twenty years, however he stated the VC and startup ecosystem has modified “drastically” within the final 5 years. He stated 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 instructed CNBC in an interview. 

Nashville can also be residence to the Nashville Entrepreneur Heart, which helps join startups with the assets and assist they want. The middle opened its flagship facility in 2010 after the Nashville Space Chamber of Commerce commissioned a 75-person “Entrepreneurship Job Power” again in 2007. It has labored with greater than 10,000 entrepreneurs since 2010, in response to its web site. 

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

“The neighborhood is actually behind that,” Gibbs stated. 

Eligible Nashville entrepreneurs may also change into 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 firms, together with HCA Healthcare, and it gives networking alternatives and academic occasions. 

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

“I can not let you know how usually folks need to seize espresso or seize a glass of wine or one thing simply to speak in regards to the trade and share classes realized,” Wilson instructed CNBC in an interview.

Past the sensible enterprise benefits, many well being tech founders and traders have discovered that Nashville is solely a enjoyable place to dwell and lift a household. 

Stay music is ubiquitous within the metropolis, and Tennessee has no state earnings tax, which Whitney stated is enticing to many residents. Whitney helped convey skilled soccer to Nashville, and Tennessee is residence to skilled soccer, hockey and basketball groups as nicely.

“We’ve got, I believe, all of the issues that you’d need from a metropolis, however most likely a bit of bit extra neighborhood than possibly a few of the extra aggressive tier-one cities have,” he stated. 

Nonetheless, Whitney stated there may be nonetheless “a variety of work to do” to enhance the schooling system in Nashville. Tennessee ranks thirty third in schooling within the U.S., in response to U.S. Information & World Report. He added that infrastructure can even should preserve tempo with town because it grows, as he’s already noticing extra visitors.

Herlacher of LRVHealth stated Nashville remains to be comparatively accessible and straightforward to navigate, including that there’s a lot much less visitors in comparison with cities like Boston and San Francisco.

“It isn’t arduous to depart work, drive quarter-hour, rapidly seize a drink with any individual after which be at residence for dinner at 6:30 p.m.,” she stated.

Herlacher stated Nashville is sort of “unrecognizable” from when she grew up there. However regardless of all of the change, she says variety remains to be a problem. She stated it’s much less frequent to seek out girls in entrepreneurship there, for 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 stated it’s nonetheless uncommon to seek out feminine founders, and particularly venture-backed feminine founders, within the metropolis. 

Even so, she stated 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, vitality, the place Nashville is not only Nashville anymore, it isn’t simply the southeast, nevertheless it’s linked to in every single place else,” she instructed CNBC in an interview.

Thyme Care’s Shah stated Nashville may be very welcoming to newcomers, and he discovered that the well being tech neighborhood embraced him instantly. It was surprisingly straightforward for him to regulate after transferring from New York greater than 5 years in the past. 

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

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

Bass of Hashed Well being stated there’s a “robust neighborhood really feel” amongst entrepreneurs and VCs in Nashville. It isn’t 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 dwell within the neighborhood, and so they’re in well being care, or tech or enterprise capital,” Bass stated. “It is nearly a each day factor.”

In some instances, Nashville’s well being tech neighborhood will be supportive to a fault. 

Chase Spurlock, co-founder and CEO of Decode Well being, stated folks can expertise a phenomenon referred to as the “Nashville no,” the place they’re instructed “possibly” indefinitely. He stated it’s a reflection of town’s southern roots and want to not be too damaging. 

Decode Well being is a knowledge platform that’s designed to assist pharmaceutical, diagnostic and know-how firms establish new biomarkers and construct new scientific choice assist instruments. Spurlock, a Tennessee native, based the corporate in Nashville in 2019.  

Spurlock stated he’s “proud” that he has been capable of keep within the space. He stated there’s a real want to see entrepreneurs and know-how reach Nashville, and that the neighborhood is dedicated to paying it ahead.   

“I’ve by no means wanted assist and never obtained assist in the Nashville neighborhood,” Spurlock instructed CNBC. “That is, I believe, 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.