Sunday, April 13, 2014

Chicago Startups Raised over $157M in Q1 2014

Chicago Startups Raised over $157M in Q1 2014

Update 11:51 AM -  We updated the total amount of funding raised in Q1 to $157M. We previously reported that Trustwave raised $25.5M, however we were informed by their team that it was not a raise, they filed a Form D in connection with a recent merger/acquisition. 
Funding for Chicago-based digital companies accelerated in the first quarter of the year, pulling in a total of $157 million. That translates to about $1.75M million a day, a 157% percent increase over total funding raised in the same period last year.
It wasn’t just funding that accelerated in Q1: exits and launches picked up the pace, too. On average, Chicago entrepreneurs started a company every other day with 42 new companies formed. This nearly doubles the pace of startups from a year ago, when the city formed 22 startups in Q1 2013.
Twenty Chicago companies raised over $1 million in funding this quarter. Some of the top fundraisers include – AvantCreditBase CRM and Abe’s Market which each raised capital in the 8-digit range – brought in a total of $125 million. AvantCredit singlehandedly beat out the total amount of funding raised by all local digital startups in this period last year with $75 million. But even without the hefty figure from AvantCredit, the city still would have beat out funding from the first quarter of last year.
The industries that performed well last quarter don't come as a surprise. Chicago's digital startups stayed true to the city's entrepreneurial roots with e-commerce and travel tech companies leading the way just as they have been known to do in the past.
Chicago's e-commerce companies had an especially good quarter, which makes sense given the city's deep roots and talent in the industry thanks to companies like Braintree and Groupon. Abe's Market set the pace this quarter for Chicago e-commerce startups with a $10 million round to boost its natural and organic food marketplace. Eyelation, which raised $1.3 million, also helped to propel Chicago's e-commerce reputation forward.
A travel startup, Options Away, also helped to highlight the local travel tech industry made famous by companies such as Orbitz and United.
Healthcare companies such as Procured Health (which raised $4 million), First Stop Health (which raised $2.2 million) and Opternative (which raised $1 million) also held their own this quarter and, along with companies like GoHealth and ContextMedia, are helping to make a name for Chicago's health tech sector.
Companies that successfully raised funding ranged from those working on tricky issues such as a hiring management platform (Hireology) to a voice-based marketing automation system (Ifbyphone) to 3D retail simulations (InContext Solutions). The diversity of these companies shows that Chicago won't be pigeonholed to just a few sectors of the tech scene.
Eleven companies exited in Q1, up from just two in the same period last year. This is a serious acceleration in pace; last year a total of 19 companies exited. Only three publicly disclosed acquisition numbers, which topped $756 million. 
Looking beyond this first quarter, Chicago startups are making some big promises. Just look at GrubHub, the online food delivery platform that debuted on Wall Street last week at $26 a share. By the end of last week, the share prices increased by about 30 percent, valuing the company at over $2.6 billion. Q2 is already starting off on the right foot for Chicago tech.
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