As startups everywhere try to weather "the funding winter," there are some in Chicago that are staying hot.
The number of venture capital deals nationally fell to the lowest level since 2017 in the first quarter of 2024, and funds raised by VC firms also experienced continued declines. With VC dollars getting harder to come by, startup founders are facing a new reality.
Down rounds, flat rounds, extension rounds and insider-led rounds have become more common as companies have been unable to match previous valuations. Chicago's Cameo, for instance, named to the Inno Fire list in 2021, recently raised $28 million in a round that was estimated to bring the one-time unicorn's valuation down to $100 million.
Startups that have found the most success on the fundraising trail in the past year are delivering strong financial metrics or delivering new products. Companies like Mycocycle and Aeropay brought in new funding over the past year in part because they were able to show clear growth to investors.
Meanwhile, some industries continue to burn — including artificial intelligence, life sciences and clean tech — and were featured repeatedly in this year's Fire Awards. In fact, PitchBook data showed that $1 out of every $3 invested in 2023 went into AI companies last year, comprising roughly 20% of deal volume.
As the stock market has hit new heights in 2024, startups and their venture-capital backers hope the IPO window may finally be reopening after two years of little IPO activity from the tech sector, and the local startups that do make that push will be the ones to watch in 2024.
While whittling the companies setting the local innovation economy ablaze down to 50 is never easy, this year was particularly difficult.
Now in their 10th year, this year's Chicago Inno Fire Awards highlight startups, investors and innovation hubs in the local tech and startup scene, honoring the companies and organizations setting Chicago's innovation economy ablaze. The companies on this year's list range from early-stage startups that are already making a name for themselves to those ready for the late stage of their startup journey.
We will announce the Blazer winners — the top firms in each category — at the Fire Awards' triumphant return to an in-person event on Aug. 27. In the meantime, check out the 50 companies and organizations that we think have made big headlines this past year.
Fire starters
Accelerators, investors and ecosystem supporters that are sparking Chicago's innovation ecosystem
Designated as an official U.S. Tech Hub for quantum technologies, The Bloch is one to watch amid Chicago's quest to become the Silicon Valley of quantum tech. The coalition, which includes Fortune 500 companies such as IBM and Microsoft, seeks to advance quantum technologies and develop tech solutions for things like logistics optimization, drug discovery, fraud detection and more. As Illinois looks to become a global competitor in the quantum sector, The Bloch hopes to be a major part in that push to develop the future of quantum.
Venture firm Bluestein Ventures, which focuses on high-growth consumer brands, proprietary food tech, next-gen commerce and value-add digital tech, raised a new $45 million fund to begin 2024. After operating as a family office since 2014, the firm said its third fund is the first in its 10-year history to take outside capital. The Chicago-based firm has made more than 40 investments since its launch, backing breakout companies such as Factor, Foxtrot and Meati.
Founded in 2016, water accelerator Current will lead Great Lakes ReNew, a six-state coalition that won a grant of up to $160 million from the U.S. National Science Foundation as part of its Regional Innovation Engines program. The initiative will support the development of water-based innovation in the region by finding new ways to recover and reuse water, energy, nutrients and critical materials from water. ReNew hopes to attract new American manufacturers to the area and will be working with dozens of startups to help them on their commercialization journey. Since its founding, Current has helped raise more than $45 million to support water innovation in the region.
Supported by The Pritzker Organization and headed by co-founder and managing partner Jason Pritzker, 53 Stations launched a $190 million fund in November with initial investments in companies such as Altana and Black Buffalo. Pritzker called the firm "industry-agnostic" in a conversation with Chicago Inno last fall, but said it would be opportunistic.
The Garage at Northwestern University
Northwestern's premier student accelerator had what manager Carly Kramer called a "banner year." The Garage launched three new programs, including Alumni VentureCat, Northwestern's inaugural alumni startup competition, which received more than 75 submissions in its first year. In 2023, The Garage dispersed more than $300,000 in total funding to student-founded ventures through programs and pitch competitions.
Rosalind Franklin University's biomedical incubator Helix 51, which celebrated its fifth-year anniversary in April, is now home to 12 early-stage startups, including its first international company. The incubator also added four new companies in May, two of which were spun out of local research institutions.
Chicago early-stage venture capital firm Hyde Park Venture Partners completed raising a $98 million fund, its first since 2019 and its fourth fund since the firm's inception in 2012. The fund was an early backer of Chicago startups such as ShipBob, FourKites, G2 and Dentologie.
University of Illinois' accelerator program for student-led startups just completed its 10th year, over which time iVenture companies have raised more than $110 million.
Since its inception, Matter has helped more than 1,000 health care startups accelerate innovation and move to commercialization. The incubator's startup community raised more than $340 million in funding last year, despite the considerable fundraising challenges faced by startups, and the organization facilitated 27 collaborations between large enterprises and startups through its programs in 2023. Matter launched flex memberships in October, offering a cost-effective option for entrepreneurs.
The largest independent hard-tech and manufacturing innovation center in the U.S., mHub rounded out 2023 by opening its new headquarters, out of which more than 275 active companies now work. The 2022 Blazer winner, which celebrated its five-year anniversary that year, has become one of the most active investors in climate and energy startups in Chicago with a total of 21 climate and tech investments since 2022.
Chicago venture capital firm 7wireVentures closed its latest $217 million fund in October, bringing its assets under management to more than $500 million. The newest fund will invest in consumer-first, tech-enabled health care solutions and support "high-potential companies" from the firm's existing portfolio heading for later stages of funding. The fund will also invest in Series B and C companies.
Embers
Early-stage companies ready to make their mark
Skokie, Illinois-based 3D printing startup Azul 3D wants to be at the future of digital manufacturing. The startup raised $15 million in Series A funding in late 2023 and in June launched its newest product, the Ocean printing platform. The company says Ocean is the world's largest and most productive area-wide 3D printing solution and it will offer new engineering possibilities to improve polymer production.
Founded by Mark Cozzi and Drake Nickell, Chicago-based cannabis edibles brand The Bettering Co. opened its new manufacturing facility last year after raising $6.7 million in new funding. The funds were used in part to complete the startup's first production facility in Rockford, which came with a commercial kitchen.
Chicago's smokeless tobacco company Black Buffalo has tripled its sales growth in the last 12 months, selling the fastest-growing nicotine pouches in the country. Sold both online and through major convenience store retailers, the brand has added 7,000 new retail locations over the past year. The Chicago startup raised $30 million of equity capital led by The Pritzker Organization in 2022.
Chicago startup Cour Pharmaceuticals raised $105 million to begin the year in a Series A with participation by pharmaceutical giants like Pfizer and Bristol Myers Squibb. The company uses proprietary nanoparticle technology to address a wide range of immune and inflammatory conditions, and CEO John Puisis told Chicago Inno that the funding would help the biotech startup move from being a tech company to one driven by clinical trials.
Crypto startup Cube Group moved into new offices in Fulton Market earlier this year and is coming off a $9 million dollar seed raise in October.
One of Chicago Inno's startups to watch in 2024, Flow Medical is one of 65 startups from around the world that will participate in the latest cohort of the Los Angeles-based MedTech Innovator accelerator. Founded by University of Chicago researchers Jonathan Paul and Osman Ahmed, Flow Medical received a $1 million investment last year to help it move to commercialization and step outside the University of Chicago's ecosystem. The company also brought in Jennifer Fried, an early-stage health care investor and startup founder, as co-founder and CEO.
Level Ex is going to space. The tech startup — or at least its technology — is one of 38 projects selected for astronauts to conduct on the five-day SpaceX's Polaris Dawn mission, where the company hopes to demonstrate that an untrained astronaut with no medical background can do ultrasounds in space.
After appearing on ABC's "Shark Tank" in March and striking a deal with Mark Cuban, Mella Pet Care is focused on growth in 2024. The Chicago startup wants to make taking your pet's temperature a little easier with a new thermometer.
Supply chain startup Nutrad was named the most innovative startup at the Transform Data Science and AI Accelerator at the University of Chicago’s Polsky Center for Entrepreneurship and Innovation to end 2023. The company aims to replace tedious, error-prone, manual tasks in the supply chain with artificial intelligence.
Northwestern spinout Rhaeos makes a medical device called FlowSense that tracks cerebrospinal fluid flow in shunted hydrocephalus patients through a wearable skin patch. From well-known Chicago inventor John Rogers, the company closed a $10.5 million Series A round in February 2023, but it didn't stop there. The Chicago startup received a $1.5 million grant from the National Institutes of Health and an additional grant from the Midwest Pediatric Device Consortium earlier this year.
Since its $3.1 million raise in September, Partum Health has continued to remain active in Chicago's tech scene. The health startup offering birth and postpartum doula care was named a finalist in 1871's WMNtech Pitch Competition and participated in Matter's 51 Labs accelerator.
Not all flexible workspace operators faced the same problems WeWork did in 2023. As the coworking space giant shrunk last year, Worbox grew. The Chicago coworking space operator announced $17.5 million in Series A financing earlier this month — bringing its total funding to date to $25 million — and plans to add another 10 locations nationally by the end of 2025. Workbox is opening at a former WeWork location in Fulton Market, which was among several spaces WeWork announced it would not be keeping.
Clean energy
Chicago startups finding alternative forms of energy and companies fighting climate change
The first tenant at Fulton Labs' Science Ready Lab Suites, Celadyne Technologies pulled in $4.5 million in February to accelerate its growth as it aims to be at the center of the hydrogen revolution. CEO Gary Ong told Chicago Inno the company expects to double its customer base with the new funding as it continues to advance its fuel cell technology in the next year.
ClearFlame Engine Technologies
Backed by Bill Gates' Breakthrough Energy Ventures, ClearFlame Engine Technologies sold its first truck in January. ClearFlame expects to make additional sales in the first half of 2024 and is completing lease agreements for limited production trucks, targeting two to three dozen units with select customers. The Chicago startup retrofits diesel engines to run on cleaner fuel and secured $30 million in Series B funding in March 2023.
Founded in 2020, fuel procurement and management platform Fuel Me closed on new financing co-led by Pritzker Group Venture Capital and Tribeca Venture Partners in March after seeing fivefold revenue growth year-over-year. Fuel Me's $18 million Series A round included new investors such as Hyde Park Angels. The startup is focused on expanding its market share in 2024.
Chicago startup HData closed on a $10 million Series A in March that will be used to grow its platform and create the largest library of regulated energy data available. The round was led by Chicago's Buoyant Ventures, the early-stage venture fund focused on climate tech, with participation from Hyde Park Venture Partners, among others.
Named to Time's 100 Most Influential Companies, LanzaJet has been cashing checks all year including $30 million from Southwest Airlines and $20 million from Groupe ADP as it works to make the aviation industry more sustainable. The company recently opened its Freedom Pines Fuels facility, the world's first alcohol-to-jet sustainable aviation fuel production facility. The company was one of 40 to join the Sustainable Aviation Fuel coalition with the goal of rapidly scaling investment in the SAF sector as well as advocate for incentives and policies necessary to build the marketplace.
After pulling in $2.2 million in seed funding in 2023, Chicago clean-tech startup Mycocycle added $3.6 million in a seed extension earlier this year. Founder and CEO Joanne Rodriguez said in May that the startup, which trains fungi to eat trash, has tripled its research and development footprint following the seed extension and would be expanding its commercialization in 2024. The startup recently partnered with Tarkett to leverage the power of mushrooms to manage construction waste.
NanoGraf is another company that keeps collecting checks, including $24 million in total investment from the Department of Defense between 2023 and 2024 as of January's latest $15 million. The battery startup locked up new space in March to help further build out its technology and manufacturing footprint after opening the first large-volume silicon-oxide manufacturing facility in the West Loop three months earlier.
Chicago startup Natural Fiber Welding makes sustainable fashion materials for brands like Ralph Lauren and Alexander McQueen. The startup partnered with Sage Automotive Interiors in October to bring plastic-free, plant-based leather alternatives to automotive interiors as part of Sage owner Asahi Kasei Group's efforts to invest $100 million in early-stage startups that aim to solve environmental issues. Natural Fiber Welding raised $85 million in 2022 and received a $3 million loan from the Peoria County Board to purchase manufacturing equipment.
After signing on for around 62,000 square feet at the Terminal in West Humboldt Park last year, Chicago startup Numat Technologies will add another manufacturing facility in Wisconsin. Serving as the company's second U.S.-based, high-volume metal-organic frameworks manufacturing facility, the site is expected to be operational in the second half of 2024. The Northwestern spinout has raised $23.7 million to date.
Burning hot
Growth-stage companies that are pulling in new funding, approaching a major milestone or ready to expand
Founder Daniel Muller thinks it was Aeropay's healthy finances and strong revenue growth that led to a favorable fundraising environment for the Chicago-based fintech startup, he told Chicago Inno in May. Aeropay, an account-to-account payment provider, plans to grow its Chicago team in 2024 after landing $20 million in Series B financing led by Los Angeles-based fintech venture capital firm Group 11.
Chicago health care tech startup Artisight completed its Series B funding to begin the year, which included new strategic and client health system investors as well as full participation from Series A investors. The startup and its Smart Hospital Platform — which aim to identify workloads and workflows of clinicians and caregivers to try to figure out which could be augmented through the use of AI, ambient sensors, computer vision and natural-language processing — were also selected to participate in the Microsoft for Startups Pegasus Program earlier this year.
Founded in 2015, Chicago cryptocurrency startup CoinFlip is known for its bitcoin ATMs and now has more than 4,500 kiosks across 49 U.S. states plus international locations. The company's digital bitcoin/crypto exchange platform, dubbed Olliv, sponsors the NASCAR Chicago street races, and CEO Ben Weiss was named a 2024 Chicago Titan 100.
Chicago-based Dentologie wants to make going to the dentist a little more enjoyable. With primarily millennial clientele, the dental startup reached 10 Chicagoland locations to begin 2024, expanding to the suburbs for the first time with the opening of its Oak Park location following a $25 million Series B raise. The company plans to open as many as 12 more locations and expand into new markets in 2024 and 2025. Founded in 2013, Dentologie aims for accessibility and combines technology with a patient-focused approach that offers contactless check-in and anytime access for dental care.
Access to home-based care is a massive problem in the health insurance industry that Dina hopes to solve. The AI-powered care-at-home platform and network closed a $7 million Series A and is now live in 10 states, with plans to be live in 10 more by the end of the year.
Chicago biotech startup Evozyne raised $81 million in September and expects to focus on maximizing its generative AI platform for drug development and carbon capture over the next three years. The company brought on biotech veteran Marc Yaskowitz as CEO in January.
Founded in 2010 and headquartered on Michigan Avenue, GeoWealth reached more than 100 employees in 2023 with plans for further expansion in 2024. The Chicago fintech startup recently surpassed $28 billion in assets on its Turnkey Asset Management Platform for registered investment advisors, marking a 45% growth rate year-over-year and a 200% growth rate since 2020.
Launched in December 2018, Hallow is now the No. 1 Catholic app in the world. In 2023, the Chicago startup raised a $50 million Series C. The prayer-based app offers audio-guided prayers, meditations, Bible readings and music, and in February appeared on a 30-second Super Bowl ad featuring Mark Wahlberg that aired in 14 major cities.
On the heels of a $36 million Series B in May, Honeycomb Insurance, which provides digital insurance for landlords, plans to double its head count of 90 employees to 180 within the next 18 months. Itai Ben-Zaken, co-founder and CEO of Honeycomb, said one differentiator for the company, at a time when more startups are taking on bridge financing and closing down rounds, was its consistent growth.
Artificial intelligence is one area where top-tier venture capital firms continue to place their bets, as was the case with Chicago logistics startup Loop. The AI-powered audit and payment platform raised $35 million in a Series B last year, co-led by J.P. Morgan Growth Equity Partners and Index Ventures. Loop was founded in 2021 by former Uber Freight team members after they continued to see the same pain points in the global supply chain with billing and payments.
Nucleai, a Chicago health-tech startup powered by AI, is hoping to get to clinical trials following a recent raise. The company recently pulled in $14 million in new funding, led by M Ventures, bringing the startup's total funding to date to $60 million. The Series B extension will allow Nucleai to deploy its AI-powered spatial biomarker technology and deploy its platform to patients for clinical trials.
Data analytics platform Ocient secured nearly $50 million in add-on funding in 2024, bringing its total investment capital raised since its founding to $119 million. The company's products and services enable organizations to analyze an ever-accelerating amount of data in their respective industries.
Ready to explode
Late-stage companies that are leading the way and could be the next to IPO
Medical device company Augmedics closed on a $82.5 million Series D last year, and its augmented-reality navigation system became the first to gain FDA approval for surgery and the first to be used in surgery in the United States.
After reaching unicorn status at the end of 2023, Kin Insurance announced new financing in February from Activate Capital and was one of a limited number of Chicago startups to raise a triple-digit funding rounds in the past year. The company is a direct-to-consumer home-insurance business.
Chicago-headquartered legal-tech company Relativity continues to expand its platform with artificial intelligence. Although the company, a maker of e-discovery software for lawyers, has integrated AI into its products for more than 15 years, the past 12 months has been marked by new innovation and an expansion of its generative AI solutions.
Logistics startup ShipBob is preparing to go public with a $4 billion valuation. The startup, which helps small- and medium-sized e-commerce companies ship their products, closed $200 million in a Series E round in 2023, bringing its valuation to more than $1 billion.
Tegus, a Chicago startup that gathers financial data on private and public companies for investment research, was bought by AlphaSense for $900 million in June. Tegus raised $650 million in funding as part of the deal, bringing its valuation to $4 billion.
After long being eyed as one of the startups that are next up to IPO, Tempus announced in June that it raised $410.7 million in an initial public offering. The health care technology company leverages artificial intelligence to analyze medical data.
This story has been updated to correct the Rhaeos company description.
