With $1.6 billion in funding and $7 billion in exits, Chicago tech had its biggest year ever in 2014. And though it'd be fair to expect a bit of a drop off in 2015, the city's innovation economy continued to register major milestones and wins, culminating in being named the 7th best tech hub in the world in July.
As Hyde Park Angels' co-founder Jeffrey Carter so perfectly summarized, "We've basically gone from nothing to number 7 in the world. And that's pretty good."
To review Chicago tech's "pretty great" year, we hit on all of the companies, people, places, and trends that helped shape it, from A-Z.
A, SERIES As: Fortunately, thanks to bootstrapped pillar successes like ContextMedia, kCura and dozens more - as well as a culture of growing pragmatically through customers (a novel idea, I know) - the city's ecosystem isn't defined by funding headlines. However, that doesn't mean that Chicago's missing them.
This year, a number of high-profile local startups closed major Series As, including VillageMD's $36M, Apervita's $18M, Zest Health's $6M, G2 Crowd's $7M, XOR Data Exchange's $4.2M, Blitsy's $3.6M, and many, many more.
B, BOOTCAMPS: In Illinois, there were nearly 50,000 IT job postings a quarter in 2015, an 80+% increase year-over-year. To qualify for these open, lucrative positions, many people are turning to coding bootcamps, 8-12 week intensives that are designed to give participants a crash-course in programming (and other 21st century skills, like digital marketing and front-end design).
Graduates of these bootcamps increased dramatically this year - up to 16,000 grads over last year's 6,700 - and there are number of local, nationally-recognized options in the city, such as Dev Bootcamp, Startup Institute, General Assembly, Designation IO, and others.
C, CROWDFUNDING: In July, Governor Rauner passed the Illinois Intrastate Equity Crowdfunding Bill, enabling business owners and entrepreneurs to raise capital from a large number of people, with these investors receiving equity in return. Though other states have passed similar legislation, Illinois' crowdfunding bill is "more friendly to small businesses than any other in the nation."
Also, travel jacket BauBax, a Kickstarter campaign co-created by a Northwestern MBA student, became the most funded clothing project ever, with over $9M raised.
D, DMDII: In May, the Digital Manufacturing and Design Innovation Institute officially opened its doors, cementing Chicago as the epicenter of the digital manufacturing revolution. The DMDII provides space and resources to develop breakthrough solutions to complex technological challenges. In July, the facility announced its first five project calls and in November revealed that it would be expanding to Rockford and the Quad Cities.
E, EXITS: The city notched several big exits in 2015, including Cleversafe's sale to IBM for a rumored $1 billion, Trustwave to Singtel for $810 million, Coyote Logistics to UPS for $1.8 billion, Orbitz to Expedia for $1.6 billion, and Catamaran to UnitedHealth for $12.8 billion.
F, FEMALE FOUNDERS: A July report measuring startup ecosystems around the world found that Chicago has the highest percentage of female entrepreneurs out of the top 20 tech hubs. According to the study, 30% of Chicago's startup founders are women, significantly higher than the 18% global average.
G, GLADWIN, CHRIS: Chris Gladwin, CEO and co-founder of cloud storage company Cleversafe, sold his business to IBM in October and donated $7.6M to IIT's Computer Science Department two months later. Gladwin is also the symbolic rebuttal to the argument that Chicago's tech talent "grows away." One, he built and scaled a thriving tech company here. Two, he did so by recruiting talent directly from Illinois universities.
H, HERE: For a couple months this spring, one of the biggest, most under-the-radar local tech stories was where HERE was going to end up. HERE, Nokia's Chicago-based maps division, was rumored to be an acquisition target for Apple, Uber, Facebook, and more. (These Silicon Valley giants were interested in leveraging HERE's legacy data and infrastructure to help develop driverless cars). In the end, however, the company was bought by a German car consortium of BMW, Audi, and Mercedes for $2.8 billion.
I, ILLINOIS INSTITUTE OF TECHNOLOGY: IIT has always been a source of tech talent in the city, but this year the school made some big moves that are setting it up for further success. The school is set to break ground on a new building focused on tech and entrepreneurship, announced the finalists for a $1 million social innovation prize, and received thqt $7.6 million donation from Chris Gladwin.
J, J.B.: In April, we spoke with J.B. Pritzker, one of the most important and influential people in the tech community, about the city's growth, tech bubbles, and if Chicago needs more "sexy startups." (Check out the in-depth, two part interview here and here).
Also, Pritzker Venture Capital Group, J.B.'s VC firm, continued to invest in Chicago startups throughout 2015, including participation in SpotHero's $20M Series B, Roniin's $3M seed round, and SMS Assist's $45M Series C.
K, KDWC VENTURES: In November, it was revealed that the city is getting a new $125 million fund that will be primarily focused on Chicago tech. (KDWC Ventures is co-led by Dick Kiphart, one of city's "busiest angel investors"). This is a big deal because there have only been 14 $100M+ funds raised in Chicago in the past decade, compared to 95 in Boston.
L, LEAP INNOVATIONS: This 1871-based edtech hub offers some hope to a school district that has had a pretty tough year. The organization connects edtech innovators with Chicago's teachers to drive educator-influenced products, and gives schools massive grants and resources to bring blended learning to classrooms. This year it received $5.1 million grant from the Gates Foundation and $4 million in funding from various other sources, and their initiatives are on track to impact 13,000 students.
M, MOTOROLA SOLUTIONS: Earlier this year, Motorola Solutions, the maker of public safety communications devices, was rumored to be up for sale and "failed to find any takers." Instead, the company received a $1 billion investment from private-equity firm Silver Lake, stating that it would use the funding to bolster its software and services business. In December, the company followed through on this claim, acquiring U.K.-based Airwave Solutions, the largest private operator of a public safety network in the world, for $1.2 billion.
Also, in the Fall, Motorola Solutions announced that it would be relocating its corporate headquarters to Chicago, moving 800 jobs downtown from Schaumburg.
N, NEWSLETTER: Launched in August, 2014, The Beat is our daily newsletter covering local and national tech and innovation, as well as whatever else is on our mind. If you'd like to read about everything on this list as it breaks, sign up for The Beat.
O, ON-DEMAND: Nationally, the on-demand space is exploding, with VC funding reaching $3.78 billion in the first four months of 2015, nearly a 500% increase from 2010. In Chicago, several on-demand startups raised millions this year - Foxtrot raised $1.1 million, Whittl raised $3.3 million - and GrubHub, the country's leading food ordering platform, continued to expand into the food delivery space with a number of strategic acquisitions.
P, PARKING: Coincidentally, two of the city's fastest-growing, most high-profile B2C startups are in the parking space - SpotHero and Parkwhiz. Both apps offer on-demand parking solutions for drivers and have been rapidly expanding into new markets throughout 2015. In August, SpotHero raised a $20M Series B, nearly a year after ParkWhiz's $10M round of funding.
Also, Parknav, out of 1871, is an app that uses uses proprietary and public data sources to display real time street parking options. The service is currently live in over 40 U.S. cities and 30 German cities.
Q, QUADS: In April, we launched our Education Beat, focusing on campus entrepreneurship and innovation, STEM efforts, EdTech, and much, much more. In order to truly cover the city's ecosystem, we wanted to be hyper-focused on the health and output of its pipeline. You can check out this community's complete archive here. (Also, I know this is a bit of a stretch; Q's are hard).
R, REBRAND: For Chicago tech, it was the Summer of the Rebrand. Avant dropped Credit from its name, Recsolu changed to Yello, Iris Mobile is now Persio, Sprout Social changed its logo, Kapow Events became Kapow, and Devbridge Group went through a "brand refresh."
S: SERIAL ENTREPRENEURS: Whereas new, first-time founders can help build a startup ecosystem, you need serial entrepreneurs to sustain it. This year, a number of businesses from local tech veterans launched or scaled, including Reverb (from optionsXpress' David Kalt), Avant (from Pangea Properties and Enova), Uptake (from Groupon's Brad Keywell), Dough (from Thinkorswim's Tom Sosnoff), and Tok (from Brian Fitzpatrick, who helped build Google's Chicago office).
T: TECH TALENT: This year, a controversial front page story on the Sunday Tribune used five anecdotes to suggest that "Chicago's tech talent grows away." As a response, we talked to dozens of founders and CEOs that have built and recruited here, as well as spotlighted data that helps plug the "brain drain" argument. If you want to have a more nuanced conversation about the city's tech talent, check it out.
U, UNICORNS: Of the country's 140 tech unicorns, only four are located outside of the coasts. And they're all in Chicago - Avant, Uptake, Mu Sigma, and ExteNet. Also, next up on the list is Raise; the marketplace for buying and selling unused gift cards has a rumored valuation of just shy of a billion.
V, VIV: Viv is a Silicon Valley-based artificial intelligence startup that's developing a next-gen version of Siri. The Chicago connection? The company received funding from both Pritzker Group Venture Capital and OS Fund, which was founded by Braintree's CEO, and it's led by Chicago entrepreneur Dag Kittlaus, who actually commutes from his home in Barrington, Illinois to San Jose.
W, WEWORK: In September, Chicago launched the Beta City Initiative, an effort to make the city more inviting to out-of-state startups and position itself as the ideal market to expand into.
One business that's had tremendous success launching in Chicago has been WeWork, the New York-based network of co-working spaces. In April, WeWork opened a 400-person location in River North and then followed that up with a 900-person, 75,000 square foot space in Fulton Market. This Fall, the company revealed that it was opening ANOTHER massive, 50,000 square foot space on Michigan Ave across from Grant Park.
X, X-RAYS: RSNA, the annual meeting of the Radiological Society of North America, is the industry's largest conference and is held at McCormick Place in late November. This year, researchers presented a study showing that XBox Kinect, the motion-sensor gaming accessory, can actually be used to create better, more affordable X-Rays.
Y, YOU'RE WELCOME: This summer, the twin towns of Champaign-Urbana released a hilarious, sassy video titled You're Welcome. The campaign highlights the area's high caliber of tech jobs, intellectual community, growing cultural diversity, and low cost of living, in hopes of reminding recent grads and far out alums of the benefits of the college town.
Z, ZOO: In August, we hosted the inaugural Chicago Fest, our summer celebration for and of the city's innovation class. It was held at the Lincoln Park Zoo and, at the event, we announced the Coolest Companies Winners.
(With additional reporting from Karis Hustad) (Main image via flickr user stuckincustoms)
