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For years, the southeastern United States has played second fiddle, or worse, to hot spots like Silicon Valley when it comes to attracting tech-based startups. However, new initiatives in venture capital investment are creating a different narrative in the deep south for emerging companies looking to grow and scale operations. The Alabama Futures Fund (AFF), “a seed stage venture capital fund focused on growing and supporting entrepreneurial activity and economic development in Alabama,” has emerged as a major player in the state’s push toward becoming a startup-friendly destination.
With backing from big name supporters like NBA great and Auburn alum, Charles Barkley, the fund has been able to attract talented startup teams from across the nation. The most recent addition to the AFF’s portfolio is HealNow, a New York-based healthcare startup that is currently in the process of transitioning to Birmingham, Alabama’s own healthcare hub.
In a statement announcing the successful recruitment of the startup, the fund describes HealNow as a platform that has “developed an onboarding and payments platform for online and traditional retail pharmacies. The HealNow platform is integrated into a pharmacy’s electronic records workflow to create a seamless communication and payment conduit between the pharmacy and patient.”
HealNow’s value proposition lies in its startup's ability to “streamline the prescription fulfillment process” in ways that have “proven to increase revenue for partner pharmacies by providing electronic payment processing solutions,” improving the customer service experience for pharmacy patrons, the company claims.
The founders of HealNow, Halston Prox and Joshua Smith, are both Black, a rarity among funded ventures. According to BLCK VC, a Black-owned San Francisco-based non-profit, “more than 80 percent of venture firms don't have a single Black investor and just 1 percent of venture-funded startup founders are black.”
Although the Alabama Futures Fund led HealNow’s initial investment round, the fund was not alone in its support of the Black-owned venture. The SoftBank Opportunity Fund, a $100 million venture fund dedicated to supporting and building a community of outstanding Black, Latinx, and Native American founders, also provided a boost to the company's funding package.
Prox, HealNow’s CEO, made no secret of his excitement about the move from New York to Birimingham. "We are very excited to announce the move of our headquarters to Birmingham and are thrilled to have funding partners like AFF and SoftBank to help us build an incredible company. Together, we will be able to expand our footprint throughout the east coast, southern states, and thriving communities such as Birmingham. This partnership moves us closer to achieving our goal of bringing the entire pharmacy industry online.”
Since its founding in 2018, the Alabama Futures Fund has already backed nine promising companies with venture capital financing. Focusing on early-stage startups, like HealNow, the fund assists participating companies in securing “series A” financing, or first round financing, within the span of 12-24 months. Additionally, the fund is keen on providing support beyond the series A funding round, reserving “significant capital for follow-on investments in our most promising companies,” according to the AFF website.
The initiative favors “companies that have adaptable and coachable founding teams who have identified a significant customer problem and are working towards product market fit. This includes companies at the minimum viable product, pre-revenue and early revenue stages.”