A new report on startup investments says capital may be slowing over the last year-and-a-half in Alabama, even as the South is emerging as a hotbed of investment.

“The State of Startups in the Southeast” is the sixth such report from Atlanta’s Panoramic Ventures, and overall presents a bullish outlook for the region as some investors are reportedly cooling on familiar tech meccas, such as Silicon Valley, Boston and New York.

The report looks at the period beginning in 2017, through June of this year. Overall, $65.9 billion has been invested in southeastern companies since 2017, with 10,784 investments.

In the second quarter of this year alone, about $6 billion was deployed in the South, $1 billion more than the same period a year previously. The amount of capital invested annually in the South has also seen a six-fold increase since 2012.

“While the start of the pandemic stalled growth in 2020, the venture market quickly rebounded,” the report states. “In 2021, investors poured a record number of capital into the Southeast, nearly doubling 2020 and 2019′s levels.”

Looking at the last decade, the number of deals in the South increased dramatically between 2012 and 2017. But then, as the deal count slowed, the size of deals began to grow exponentially – seeing a 239% increase over the last five years.

But according to the report, deal activity and capital deployed in Alabama has slowed over the past 18 months.

That’s a contrast with neighboring Mississippi, for example, where $51 million was invested last year, outpacing all of 2017 to 2020 combined, at $36 million. Florida, Georgia, and North Carolina traditionally see most of the capital investments.

The report stated that Alabama has seen 354 investments since 2017, totaling $979 million. The top area of was manufacturing.

According to the report, in the past year, Software as a Service (SaaS) has also overtaken biotech and pharma investments, representing the second highest number of investments.

Matt Hottle is Redhawk Advisory’s co-founder and partner, as well as an investment manager with the Alabama Futures Fund. He said the report may not tell the complete story of capital in Alabama.

“What I am seeing is not showing a downward trend,” he said. “If anything, the number of investments is trending up, the amount of money invested is relatively flat, maybe a tick or two up from last year. Because we’re dealing with three to four dozen deals annually in Alabama, any one of those deals just crushes the year-over-year comparisons.”

Hottle said the number cited in the report for Alabama doesn’t appear to take into account some recent deals, such as a $125 million Series C funding reported by Landing in August.

There’s also a lot of activity at Techstars Alabama EnergyTech Accelerator in Birmingham, which last month announced its third class to go through the accelerator.

“The folks at Panorama are absolute experts in their field, so for all I know, they’ve gotten a lot of this right and I just don’t have access to it,” he said. “Alabama’s always dealt with relatively small numbers, relative deals, total amount investments, etc.”