{"id":10314,"date":"2019-12-19T10:31:01","date_gmt":"2019-12-19T15:31:01","guid":{"rendered":"https:\/\/blog.brainstation.io\/?p=10314"},"modified":"2020-05-07T12:40:38","modified_gmt":"2020-05-07T16:40:38","slug":"2019-in-review-chicago-tech-stands-tall","status":"publish","type":"post","link":"https:\/\/brainstation.io\/blog\/2019-in-review-chicago-tech-stands-tall","title":{"rendered":"2019 in Review: Chicago Tech Stands Tall"},"content":{"rendered":"

Word is spreading about the thriving tech ecosystem in Chicago<\/a>, so we thought that with 2020 set to get underway, it was a good time to look back on another busy year in the Windy City.<\/span><\/p>\n

Here are some of the top tech industry stories and development from the year that was in Chicago.<\/span><\/p>\n

VC Funding Stays High<\/b><\/h2>\n

Through three quarters of 2019 and amid a national decline, venture funding in Chicago was down slightly from the record-setting first nine months of 2017 and 2018 \u2013 $1.3 billion compared to $1.6 billion in each of the previous two years \u2013 but there was still plenty of reason to celebrate. After all, the number was still dramatically higher than the $900 million raised in 2015 and 2016.<\/span><\/p>\n

The year got off to a good start as enterprise software company Vistex raised $65 million \u2013 and up to an additional $40 million \u2013 for future strategic acquisitions, while auto insurance startup Clearcover raised $43 million with an eye on expanding to more states, and FourKites announced a $50 million Series C round to bring its total capital raised to $100.5 million. Grassroots Cannabis then turned heads by raising $90 million in March, one of the biggest funding rounds for an American cannabis company.<\/span><\/p>\n

\"Eric<\/a>

Eric Lefkofsky, Groupon Co-Founder<\/p><\/div>\n

A month later, Tempus announced the biggest funding round of the year in Chicago: $200 million Series F at a value of $3.1 billion dollars. The data-driven precision medicine company, led by Groupon co-founder Eric Lefkofsky, has grown tremendously in a short period of time; since being founded in 2015, the Tempus platform now affects more than one in four U.S. cancer patients. In announcing the funding, Lefkofsky <\/span>said<\/span><\/a> the company would hire between five and 10 people per week with the intention of adding hundreds of employees to its Chicago headquarters.<\/span><\/p>\n

\u201cFrom our founding, Tempus has been singularly focused on improving the lives of patients diagnosed with disease, starting with cancer,\u201d <\/span>said<\/span><\/a> Lefkofsky.<\/span><\/p>\n

\u201cThree and a half years later, we are empowering stakeholders across healthcare with insights derived from real-world clinical evidence connected to rich molecular data. We are humbled by the industry response thus far and remain committed to delivering on the promise of precision medicine to improve patient care.\u201d<\/span><\/p>\n

Also in the biotech sphere, VillageMD \u2013 a developer of primary care clinics \u2013 raised $100 million in Series B in September, pledging to use the money to expand its primary care footprint and enhance docOS, its primary care platform.<\/span><\/p>\n

Other Chicago startups receiving major investments included: AMP Americas, which received $75 million after developing a solution to turn cow poop into renewable natural gas for trucking fleets; LanzaTech, a next-generation fuels producer that raised $72 million in August; and Cameo \u2013 the startup that allows fans to buy personalized video greetings from their celebrities, athletes and performers \u2013 which closed $50 million in Series B financing in June.<\/span><\/p>\n

On the local acquisitions front, homegrown cannabis startup Verano Holdings was acquired by Phoenix-based Harvest Health & Recreation in a landmark March deal for $850 million. That will allow Harvest to hold licenses allowing it to operate up to 200 facilities in 16 states across the country. <\/span><\/p>\n

A Supportive Atmosphere<\/b><\/h2>\n

Chicago\u2019s ascent to tech-hub status couldn\u2019t have happened without the robust support of varying levels of government, community partners and local businesses, and that certainly continued in 2019.<\/span><\/p>\n

In November, Mayor Lori Lightfoot and several local tech leaders gathered to mark the third annual Chicago Tech Day. Hosted by eDiscovery software solutions company Relativity, the event saw attendees celebrate the 2,000 new jobs added by 15 local tech companies around the end of 2019. In 2020, Relativity will launch Relativity Fellows, a program that will find, train and employ people from Chicago\u2019s underserved communities, with a focus on the South and West sides of the city.<\/span><\/p>\n

\u201cFor tech leaders, it\u2019s important that we reach into the communities where opportunities don\u2019t come,\u201d <\/span>said<\/span><\/a> CEO Mike Gamson, noting that Relativity would be on track to expand from 1,000 local employees to 1,400 by the end of 2020. \u201cWe need to take responsibility for recognizing that talent is often distributed evenly, but opportunity is not.\u201d<\/span><\/p>\n

Chicago also got good news in October from the Illinois government when a $45 billion capital bill with tax incentives for data centers \u2013 intended to lure more IT industry to the state \u2013 was signed into law. And in August, the government launched Connect Illinois, a $420 million statewide broadband expansion project that will improve the state\u2019s infrastructure and spur future economic and educational growth.<\/span><\/p>\n

The year also saw also further recognition for Chicago\u2019s groundbreaking tech hub 1871<\/a>. At the World Incubation Summit in 2019 in Qatar, 1871 \u2013 which is home to 450 member companies, 650-plus active alumni companies, seven university partners, and 100 corporate and community partner organizations \u2013 was <\/span>named<\/span> the world\u2019s No. 1 private business incubator. <\/span><\/p>\n

\"Chicago\u2019s<\/a>

Chicago\u2019s groundbreaking tech hub 1871<\/p><\/div>\n

\u201cThe wonderful and well-deserved recognition is a testament to the energy and dynamism of our tech community and the result of countless individuals working together to make Chicago the global leader in entrepreneurship and innovation that it is today,\u201d said Mayor Lightfoot.<\/span><\/p>\n

\u201cAs we move forward into the future, we will be building on our success by strengthening our capacity downtown and expanding our reach further into Chicago\u2019s educational institutions, neighborhoods, and communities, ensuring that every entrepreneur can take their great idea and have it drive our economy, transform our lives, and change the way we see the world.\u201d <\/span><\/p>\n

Silicon Valley Giants Finding a Home in the Second City<\/b><\/h2>\n

The Windy City was the site of many a major real estate deal in 2019, as locally grown companies and especially Silicon Valley tech giants expanded the scope of their Chicago operations or established entirely new offices.<\/span><\/p>\n

Uber signed a 10-year lease at the Old Post Office in downtown Chicago in August, giving the ride-sharing company 463,000 more square feet of office space. It was the fourth-largest office deal in Chicago in the past five years according to CBRE, and it represents a further investment in the area for Uber, which counts its Chicago office as the second-largest outside of its San Francisco headquarters. Uber <\/span>said<\/span><\/a> in March that it planned to hire hundreds in Chicago for its Uber Freight unit, which connects truck drivers with shippers.<\/span><\/p>\n

\u201cUber is excited to deepen its roots in Chicago,\u201d company Spokeswoman Kelley Quinn said. \u201cThe city continues to attract the top talent that Uber needs to continue to thrive, and we remain committed to working together to have a positive impact in the local community.\u201d<\/span><\/p>\n

Meanwhile, work continued on Salesforce Tower Chicago \u2013 a brand-new, 57-story tower that the San Francisco-based cloud software company vowed would be home to 1,000 new jobs by the time it opens in 2023 \u2013 and Facebook moved closer to the projected 2020 opening of its massive new office in the Loop, which is expected to bring with it the hiring of at least 2,000 new employees.<\/span><\/p>\n

\"Salesforce<\/a>

Salesforce Tower Chicago<\/p><\/div>\n

Not to be outdone, of course, was Google. Just as the company was cutting the ribbon on its new office at 210 N. Carpenter Street, reports surfaced indicating that the Silicon Valley giant planned to occupy all the space in two new buildings planned by Chicago developer Sterling Bay. That would be 800,000 square feet combined, bringing Google\u2019s overall footprint in Chicago to about 1.3 million square feet.<\/span><\/p>\n

In fact, Google\u2019s rapid growth in Chicago mirrors the overall story of tech in the Midwest\u2019s largest city.<\/span><\/p>\n

\"Gov.<\/a>

Gov. J.B. Pritzker<\/p><\/div>\n

In 2000, Google\u2019s presence in Chicago was limited to a two-person sales office. Now, Google reports a Chicago-based workforce of 1,200 people and plans to hire thousands more.<\/span><\/p>\n

\u201cWe think of Google as a Chicago-based company,\u201d <\/span>said<\/span><\/a> Illinois Gov. J.B. Pritzker at the ribbon-cutting.<\/span><\/p>\n

\u201cThe city\u2019s culture, diversity, and strong emphasis on community made it a perfect fit for Google and we look forward to our continued growth for years to come,\u201d <\/span>said<\/span><\/a> Karen Sauder, Vice-President of Sales and Site Lead for Google Chicago.<\/span><\/p>\n

Part of the reason for the flurry of activity is that, compared to other major U.S. tech hubs, Chicago is still quite affordable. CBRE\u2019s study found that a sample tech-firm might pay roughly $40.2 million annually to operate in Chicago, far less than in the Bay Area ($59.7 million), New York ($55.3 million) or Washington ($51.7 million) and much more in line with smaller cities including Ft. Lauderdale, Fla., Portland, Ore., or Miami.<\/span><\/p>\n

Startups with Potential<\/b><\/h2>\n

With millions flying around in VC funding as we discussed, it\u2019s not surprising that Chicago continues to be fertile ground for thriving startups.<\/span><\/p>\n

Global accounting and consultancy firm\u2019s 25<\/span>th<\/span> annual Deloitte Technology Fast 500 ranking singled out 12 Chicago companies for their rapid growth:<\/span><\/p>\n