It’s rare to hear Chicago, America’s third most populous city, mentioned in the same breath as Silicon Valley, New York or Boston when it comes to the country’s tech industry. But make no mistake: exciting innovations are blowing through the Windy City, and they’re making plenty of cash too. A recent Chicago VC Ecosystem report found that Chicagoan startups give investors an MOIC (median multiple on invested capital) of 5.6 times – far ahead of Boston (3.6x), New York City (4.4x) and even the Bay Area (4.2x).
Chicago’s startups have raised over $620m in late-stage VC so far in 2018. That’s more than any year since 2011, when travel site Groupon closed a massive $950m deal. While the city’s reputation has been attacked by President Trump, whose dog-whistling about “inner city” crime has energized his voter base, Chicago business is booming. Here are five of the best tech startups coming out of Chi-Town.
This month logistics solution project44 won a $45m funding round led by Silicon Valley-based Sapphire Ventures, bringing its “Amazon-like” service for the industry to national attention. Founded in 2014 the company is one of a number of Chicagoan outfits catering to the growing logistics tech market, and recently announced plans to add 200 jobs in the city. Little wonder, when its lead customers include FedEx, Uline and GE Transportation.
2. Cresco Labs
Another company winning huge investment sums, medical cannabis grower Cresco Labs is backed by $104m in VC cash. The firm aims to lead “the cannabis conversation with a dogged dedication to developing quality cannabis products, each one obsessively researched and refined.” It has corporatized and regulated a wild market, winning admirers across the financial and political spectrum. Cresco already has operations in six US states, and plans to grow further–in both senses–in 2019.
Another logistics platform, another popular VC target. FourKites, founded in 2014, produces software that allows users to more accurately predict drop-off times, shipping quantities and companies’ supply chain data. It already has over 200 employees and is on a program of rapid growth, following a $35m cash injection this February from several of the industry’s biggest investment names including Bain Capital and Hyde Park Ventures.
Founded in 2016 Truss, which has been described as “Zillow for commercial real estate”, began after Andrew Bokor exited his cybersecurity firm Trustwave the previous year for a whopping $770m. Unsurprisingly investors have come flocking to Bokor’s latest project, targeted specifically at the small business community. Truss already has around 85% of the Chicago downtown area covered, and it’s active in seven other American cities including Austin and Boston.
Chicagoans really love their logistics! ShipBob, founded in 2014, is an “e-commerce fulfillment” service that helps SMEs ship quickly and securely. Last week it won a $40m Series C round from Menlo Ventures, bringing the company’s total funding to $62.5m, with a staff count of over 400. That makes ShipBob one of the logistics tech sector’s most exciting up-and-comers, and cements its place among Chicago’s startup elite. Y Combinator recently placed it 56th of its 100 most valuable startups.