According to the National Venture Capital Association and data from PwC's MoneyTree report, $698M has been invested in Chicago startups over the first three quarters of 2016, up from $533M in the first three quarters of 2015. This marks the state's best three-quarter start to a year since 2001. However, unless a major deal is announced over the next week, 2016 will actually be a down year for VC in the state, the first year-over-year decline since 2013.
This will be due to the fact that, unlike in 2014 and 2015, 2016 will not be capped off by a record quarter. Illinois saw $533M invested in Q4, 2015 and $469M in Q4, 2014, amounts that were almost double what had been invested the previous nine months. (Also, it's important to note that a few other venture databases attribute Avant's $325M in 2015 to Q3 rather than to Q4, which will significantly impact how you interpret quarter-over-quarter data).
Yet, despite the surface-level optics of a "down year," this has been a strong 12 month for the ecosystem. In fact, Illinois is on pace to have every quarter at or over $200M in VC, the first time that's happened in-state since the dot com era. This healthy consistency is embodied by the state's top ten tech deals of the year, which, outside of SMS Assist's $150M, are each below $45M. In 2016, the top ten deals totaled $477M, versus $773M last year, revealing a community less reliant on mega-deals.
Let's take a look at the fundings that helped define the year in tech below.
- Deal: $150 million in Series D
- Date: June
- Investors: Goldman Sachs Investment Partners
- What they do: Chicago-based SMS Assist provides property management software for 20,000 subcontracted affiliates and their 120,000 properties. SMS Assist's cloud-based platform helps property managers maintain multiple buildings by tracking maintenance orders, providing instant invoicing, automatic service audits and data analysis on properties. The deal valued SMS Assist at $1B, making the company the state's latest unicorn.
- Deal: $40M Series B in September, $10M Series A in May
- Date: September
- Investors: The round was led by L Catterton, the private equity firm that formed earlier this year as the result of a merger between Catterton, a Greenwich, Connecticut-based PE firm, and the private equity arm of LVMH, the largest luxury conglomerate in the world.
- What they do: Home Chef delivers fresh ingredients and instructions needed to cook restaurant-quality meals at home. What differentiates Home Chef from other recipe delivery startups, such as Plated and Blue Apron, is its variety and flexibility, allowing users to choose from 13 new meal options every week and update their account daily.
- Deal: $45M
- Date: June
- Investors: Syniverse, a Tampa Bay-based provider of technology and business services for a number of telecommunications companies. With the investment, Syniverse takes a minority stake in Vibes.
- What they do: Vibes, founded in 1998, is a mobile marketing agency that helps brands reach customers on mobile via a variety of products and services, such as text message marketing, mobile wallet marketing, push notifications, and more. The mobile marketing pioneer employes 130 people in Chicago and plans to use the funding to scale its international expansion, according to Crain's.
- Deal: $44.5M Series C
- Date: April
- Investors: Merck Global Health Innovation Fund; Cowen Private Investments; Sapphire Ventures; Zaffre Investments, the investment arm of Blue Cross Blue Shield of Massachusetts; Wanxiang America Corporation; and existing investors General Catalyst, Kleiner Perkins Caufield & Byers (KPCB), DFJ, and 7wire Ventures.
- What they do: Livongo Health is a digital health company focused on helping patients with chronic conditions like diabetes. Its glucose meter connects to the cloud to give people real-time information on their blood sugar, and it can send patient information to doctors and their loved ones.
- Deal: $42M Series C
- Date: February
- Investors: Goldman Sachs and New Enterprise Associates
- What they do: Sprout Social helps businesses manage their social media channels by providing engagement, advocacy and analytics solutions. Launched in 2010, Sprout Social helps brands quickly respond to customer feedback on social media, build and maintain social followings, and measure their performance across all of the major social media networks. It has landed high-profile clients like Yahoo, Spotify, Microsoft, GrubHub, and Hyatt. Sprout Social has now raised $60 million, and will use the newest round of funding to grow its products and customer base.
- Deal: $40M
- Date: January
- Investors: "Existing investors."
- What they do: Higi makes interactive health kiosks that provides health stats on things like blood pressure, BMI, weight, pulse and body composition. It has stations in nearly 10,000 retail locations and approximately 75% of the US population now lives within 5 miles of a kiosk. Higi is the brainchild of serial entrepreneur Michael Ferro, the chairman of Tronc and CEO of Merrick Ventures, and features rapper Lupe Fiasco as an early investor.
- Deal: $30M Series E
- Date: June
- Investors: The round was led by I2A, with participation from Pritzker Group Ventures, Baird Capital, EPIC Ventures, and Silicon Valley Bank.
- What they do: Marketing tech company Signal gives brands and publishers data to help gain more knowledge about their buyers, and its customers include Allstate, Audi, Crate & Barrel, GAP, and JetBlue Airways. After launching six years ago as BrightTag, Signal has over 20,000 companies and brands actively using its platform in 158 countries.
- Deal: $27.5M
- Date: February
- Investors: Unknown
- What they do: Everspring works with established universities to develop online degree programs. The company handles technology, applications, and learning management tools, while universities plan curriculum. They also provide services such as data analytics, marketing, faculty engagement, and learning design. Previously Everspring raised $16 million, including a $10 million round in May 2014.
- Deal: $26M
- Date: September
- Investors: The round was led by Kayne Partners, the growth private equity group of Kayne Anderson Capital Advisors, L.P. Previous backers Jump Capital and Prime Ventures participated in the round, as well.
- What they do: 4C, a data science and media technology company, specializes in second screen analytics, helping brands measure, monitor, and execute their campaigns across a variety of devices and mediums, including phones, tablets, TV, radio, and more.
- Deal: $22M
- Date: November
- Investors: The round was led by Drive Capital with participation from Verizon Ventures, WPP, and Alphabet Executive Chairman Eric Schmidt.
- What they do: Data science company Civis has created a comprehensive SaaS platform for data scientists to help them make data-driven decisions, similar to how the Obama analytics team used data to target voters and help re-elect the president. Since launching in 2013 from Obama campaign veteran Dan Wagner, Civis has grown from 15 to 135 employees, and counts Verizon, Boeing, Airbnb, the American Red Cross and the 2020 U.S. Census among its clients.
(Image via Wiki Commons)
