Atlanta’s MedTech Momentum Faces A Test: Can Startups Stay And Scale?
Key Takeaways:
- Atlanta’s MedTech momentum is under pressure. Office space closures and tighter early-stage funding have exposed gaps in the resources founders need to stay and scale in town.
- Support remains, but access is uneven. BioSpark Labs, ATDC, and other programs help startups advance, while connections to specialized facilities, investors, and clinical partners remain a challenge.
- Major investments raise the stakes. As Georgia attracts multibillion-dollar life sciences projects, ecosystem leaders say stronger commercialization pathways and better coordination are needed to help homegrown companies grow locally.
ATLANTA, October 27 (Hypepotamus) – At the start of 2024, we wrote about how it was the year of the HealthTech and MedTech startup in Atlanta. Investment was flowing into companies, laboratories, and programs designed to help healthcare, life sciences, biotech, and medical device founders get their businesses off the ground.
It was, by all accounts, time to sit up and pay attention to the industry.
Less than three years later, some of the infrastructure behind that momentum has disappeared.
Part of that is in the wake of macroeconomic trends hitting the overall life sciences and MedTech world. But the reality on the ground is that Atlanta has lost key healthcare investors as well as a key facility that served as a central hub for the community over the last few years. One of the larger investors in has shifted priorities and seen layoffs. Overall, capital is harder to find. And investors? They are backing fewer, but larger, deals in the industry.
So what happened to the momentum?
And, more importantly, does Atlanta still give healthcare and life sciences startups the resources to stay and scale? Interviews with investors and ecosystem leaders suggest an uneven picture. Companies are finding new homes, support programs are here, and healthcare organizations offer potential customers and partners. But the connections between those resources remain a challenge.
What’s Really Going On?
For startups developing medical devices, diagnostics, or treatments, losing a workspace can mean losing access to equipment and facilities essential to their next milestone. A traditional office cannot necessarily fill that gap.
That is why the quick closure of Portal Innovations this month was shocking to the area. Several companies who previously joined Portal have moved into BioSpark Labs, which is affiliated with Georgia Tech. That includes local companies like Moremme and Vasarya. BioSpark now houses 13 companies working on everything from wound healing to an implantable kidney dialysis platform. Its shared laboratories, cleanroom, and roughly $1.5 million in equipment give founders access to facilities they would otherwise have to finance themselves.
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Ryan Lawler, General Manager at Atlanta’s BioSpark Labs, said that the space has also brought in companies who previously worked out of lab space on Georgia Tech's campus, which is being repurposed for the Institute's new faculty research hires.
But finding a new lab addresses only one part of building a company. Lawler described founders are still facing pressure to relocate as their businesses grow.
“The open question is whether they can find the resources to start, build, and scale here,” Lawler said. “They can, but it is harder than in established hubs like Boston or San Francisco.”
Eddie Lai, a health and life sciences ecosystem leader who previously worked at Portal Innovations and the Metro Atlanta Chamber, pointed out that there are still several places in town for startups to get help getting their medical device or life sciences company past the idea stage. He pointed out resources like Kickr Labs and Georgia State’s CollabTech Incubator.
The challenge is matching those resources to companies with very different needs. Healthcare software, medical devices, and laboratory-based biotech share an interest in improving care, but they follow specialized development and commercialization paths, Lai said.
MedTech In The AI Age
Several people interviewed described tighter early-stage funding and uncertainty around federal support for science. Some hoped that the landscape might shift after the midterm elections.
The broader MedTech market offers a similarly complicated picture. EY’s latest industry report found record financing, with IPOs and debt accounting for roughly 80% of capital raised. But there are signs of overall positive movement in the early stages.
What are investors saying?
Not surprisingly, they are still thinking about AI.
John Cooper, who leads venture investment at Catalyst by Wellstar, said that while AI is drawing considerable attention, opportunity extends across healthcare operations and care delivery, he said.
“I actually think that the volatility that happens over here in the technology space sometimes can actually benefit healthcare because folks will see this as [more of a] constant," Cooper said. "There's always going to be the ability of returns, whether that's on the public market side or on the private market side.”
Maija Ehlinger
Spence McClelland, a partner at Atlanta-based Noro-Moseley, described the opportunity this way:
“Now the wave is obviously around AI, and there is a frenzy of startups and incumbents like Epic rolling out new AI-powered applications. They are starting with administrative functions like scheduling, notes and revenue cycle and quickly moving into more clinical functions including research and eventually, front-line care.”
For founders, that makes access to healthcare organizations particularly valuable. Cooper said Atlanta’s concentration of those organizations “gives you a lot of testing opportunities.”
Major investments raise the stakes for local startups
Georgia does continue to attract substantial life sciences projects. Maria Thacker Goethe, Georgia Life Sciences' President & CEO, pointed to UCB’s planned $2 billion biologics manufacturing facility in Gwinnett County and Shriners Children’s planned investment of more than $153 million in a research institute at Science Square as evidence of confidence in the industry.
For the startup community, the question is how that investment translates into opportunities for companies already building here.
“Our biggest opportunity is to become as good at growing and retaining life sciences companies as we are at attracting major investments,” Thacker Goethe said.
She pointed to the need for stronger pathways from university research into commercialization and manufacturing, supported by specialized facilities, early-stage and growth capital, and workforce development. Those are among the priorities addressed in Georgia Life Sciences’ 10-year roadmap.
Maija Ehlinger
Legacy players in the space are continuing to invest in the community. That includes ATDC, which has a 30 company HealthTech portfolio. ATDC's Greg Jungles oversees those companies, with support spanning funding strategy, sales, regulatory compliance, and manufacturing.
Jungles said Atlanta has spent the past five to six years establishing a foundation for attracting and retaining HealthTech startups. Strengthening it will require a greater concentration of investors, better coordination between organizations, and more lab space that fits startup budgets.
Giving companies reasons to stay
For Nadine Peever of Bonne Fire ATL, improving the ecosystem starts by getting people out of their separate corners.
Bonne Fire launched in 2022 as a monthly HealthTech happy hour. It has broadened into a nonprofit connecting clinicians, researchers, public health professionals, investors, founders, and students.
Peever described a difficult stretch of uncertain federal science funding and tighter early-stage capital. She also sees people responding: laid-off workers starting companies, researchers finding partners, and students looking for opportunities to build locally.
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Atlanta’s strength, she said, lies in the overlap between research, care delivery, health IT, and public health. But turning that proximity into working relationships takes deliberate effort.
For founders, those relationships can determine whether they find the next investor, research partner, or clinical contact they need to move forward. For Atlanta, they help determine whether the companies emerging from its institutions have a reason to remain.
“You don't notice a sidewalk until it's missing. Ecosystems need sidewalks too: the networks, talent pipelines, and shared spaces that help people find each other and give them a reason to stay,” Peever said.
“Atlanta has invested in the big buildings. Now it's time to build those connections.”
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Featured Photo by Venti Views / Unsplash
