{"id":8157,"date":"2019-01-24T11:19:18","date_gmt":"2019-01-24T16:19:18","guid":{"rendered":"https:\/\/blog.brainstation.io\/?p=8157"},"modified":"2019-12-19T10:33:10","modified_gmt":"2019-12-19T15:33:10","slug":"why-chicago-is-poised-to-become-a-global-tech-leader","status":"publish","type":"post","link":"https:\/\/brainstation.io\/blog\/why-chicago-is-poised-to-become-a-global-tech-leader","title":{"rendered":"Why Chicago is Poised to Become a Global Tech Leader"},"content":{"rendered":"

Once overshadowed by Silicon Valley and New York, Chicago is finally being recognized for its fast-growing tech scene. Recent studies by KPMG and the Startup Genome Project have positioned Chicago among the top 10 global cities likely to become leading hubs of technological information over the coming years.<\/span><\/p>\n

\u201cChicago has the talent, education and training programs, technology infrastructure, capital, incentives, and an innovative culture,\u201d <\/span>said<\/span><\/a> KPMG Chicago\u2019s tech industry leader Mike Gervasio.<\/span><\/p>\n

\u201cThe area is well-positioned to be a leading tech hub for years to come.\u201d<\/span><\/p>\n

Here\u2019s why Chicago is poised to become a global tech leader. <\/span><\/p>\n

A Diversity of Companies<\/b><\/h2>\n

It seems all varieties of companies are looking to do business in Chicago.<\/span><\/p>\n

Some of the <\/span>top hirers<\/span> of tech talent locally include <\/span>Motorola<\/span>, <\/span>Echo Global Logistics<\/span>, and <\/span>Groupon<\/span>, which was launched in Chicago in 2008. There have been major startup success stories in fintech (like <\/span>Braintree<\/span>, acquired by PayPal), data science (Cleversafe, which was sold for <\/span>$1.3 billion<\/span> to IBM), and healthcare (IBM also acquired <\/span>Merge Healthcare<\/span> for <\/span>$1 billion<\/span>.)<\/span><\/p>\n

Those top tech companies have been a sturdy anchor for local tech talent. The number of people employed by Chicago\u2019s biggest tech companies <\/span>rose 15 percent<\/span> from 2016 to 2017, after rising 17 percent a year prior. <\/span><\/p>\n

It also helps that the Midwest can boast a high concentration of major companies, including Kraft Heinz, General Mills, and Procter & Gamble. Better yet, those organizations have a proven dedication to bolstering the local startup scene.<\/span><\/p>\n

Consider Kraft, which <\/span>launched<\/span> an incubator program for food and beverage startups called <\/span>Springboard<\/span>, dedicated to supporting brands making healthy, organic, and experiential products. <\/span><\/p>\n

Meanwhile, Kellogg\u2019s was behind the venture capital fund <\/span>Eighteen94 Capital<\/span> \u2013 which promises to invest $100 million in fledgling companies \u2013 and General Mills\u2019 <\/span>301 Inc.<\/span> is dedicated to health and wellness startups. Kellogg\u2019s has boosted the local scene in other ways too; in 2017 the company acquired Chicago-based <\/span>RXBAR<\/span> for a stunning <\/span>$600 million<\/span>.<\/span><\/p>\n

Other companies from outside Chicago have also sought a bigger footprint in the city. Salesforce, Facebook, LinkedIn, and Microsoft have all recently expanded operations in Chicago, while Google has gone from one small office opened near the turn of the millennium to a total Chicago workforce of more than 1,000 workers.<\/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

\"Google

Source: Brian Chisholm, Google<\/p><\/div>\n

Supportive Government and Institutional Partners<\/b><\/h2>\n

Chicago\u2019s growth has been fuelled by the government at several levels.<\/span><\/p>\n

Mayor Rahm Emanuel launched a citywide technology strategy in 2013 after creating <\/span>ChicagoNEXT<\/span>, which promotes Chicago\u2019s tech scene globally, a year prior. In 2016, the state founded the Illinois Department of Innovation and Technology (DoIT) with the mission of updating the state\u2019s own technological infrastructure and creating a more efficient system overall. <\/span><\/p>\n

Meanwhile, the <\/span>Edward L. Kaplan New Venture Challenge<\/span> \u2013 offered through the University of Chicago \u2013 has graduated more than 230 startup companies that have achieved more than $13 billion in mergers and exits, including Grubhub, Braintree and Simple Mills.<\/span><\/p>\n

VC Funding is on the Rise<\/b><\/h2>\n

With almost $1.4 billion in funding <\/span>raised in 2018<\/span>, many Chicago companies had a lot to celebrate last year.<\/span><\/p>\n

Leading the way was <\/span>T<\/span>empus<\/span>, a cancer data library platform for doctors, which <\/span>raised $80 million in March<\/span> before gathering another <\/span>$110 million Series E<\/span> in August, bringing the company\u2019s valuation above $2 billion.<\/span><\/p>\n

\"Tempus

Source: Built in Chicago<\/p><\/div>\n

Also notable was the logistics management platform <\/span>project44<\/span>, which raised <\/span>$80 million<\/span><\/a> across two rounds of funding in April and October. It\u2019s little wonder the company managed to open a sprawling new <\/span>42,000-square-foot office space<\/span><\/a> in the Merchandise Mart. Once belonging to Google, the space has room for up to 250 employees. <\/span><\/p>\n

The healthcare solution startup <\/span>VillageMD<\/span> also raised <\/span>$80 million<\/span><\/a> in January, enabling the company to double the number of primary care providers it supports, and expand into markets including Michigan and Georgia.<\/span><\/p>\n

Major Exits Turning Heads<\/b><\/h2>\n

Chicago tech companies were in hot demand in 2018.<\/span><\/p>\n

In the biggest acquisition of the year, <\/span>DocuSign<\/span> \u2013 a digital transaction management firm \u2013 <\/span>announced<\/span> plans to acquire Chicago\u2019s <\/span>SpringCM<\/span>, a cloud-based document generation and contract lifecycle management software company, in a $220 million cash deal. <\/span><\/p>\n

In May, <\/span>Home Chef<\/span> \u2013 one of the top online sellers of grocery meal kits \u2013 was scooped up by Kroger for <\/span>$200 million<\/span>. In an entirely made-in-Chicago deal, <\/span>Cars.com<\/span> bought two fellow local companies \u2013 <\/span>Dealer Inspire<\/span> and <\/span>Launch Digital Marketing<\/span>, both of which provide digital tools for car dealers \u2013 for <\/span>$165 million<\/span>.<\/span><\/p>\n

And in other major 2018 deals: Chicago startup <\/span>CityBase<\/span>, which helps local governments digitize payment and administrative processes, was acquired for <\/span>$160 million<\/span> by <\/span>GTY Technology Holdings Inc.<\/span>; benefits enterprise company <\/span>Maestro Health<\/span> was scooped up by French insurance provider <\/span>AXA Group<\/span> for <\/span>$155 million<\/span>; and cloud hosting company <\/span>SingleHop<\/span> was acquired by <\/span>INAP<\/span> for <\/span>$132 million<\/span>.<\/span><\/p>\n

An Appetite for Innovation<\/b><\/h2>\n

The principal reason there\u2019s so much optimism around Chicago\u2019s future lies in its growing reputation for innovation.<\/span><\/p>\n

KPMG recently polled more than 750 global technology industry leaders and determined that Chicago was <\/span>considered<\/span> the third-most innovative tech hub in the U.S. alongside Boston, after only Silicon Valley and New York. Globally, Chicago <\/span>ranked<\/span> in the Top 10. Likewise, the Innovation Cities Program, ranked Chicago <\/span>sixth<\/span> among North American cities.<\/span><\/p>\n

And the CompTIA Cyberstates Innovation 2018 <\/span>report<\/span> ranked Illinois with the sixth-highest innovation score and the fifth-highest net tech employment rank.<\/span><\/p>\n

Those who have seen the growth up-close see no reason to believe Chicago\u2019s momentum is on the verge of slowing.<\/span><\/p>\n

\u201cEntrepreneurs stay here and keep reinvesting,\u201d <\/span>said<\/span><\/a> Alya Adamany Woods, Executive Director of ChicagoNEXT. \u201cThey\u2019re not leaving Chicago. They stay here and start more companies, and that keeps the interest here as well.\u201d<\/span><\/p>\n

\"Chicago<\/p>\n","protected":false},"excerpt":{"rendered":"

Once overshadowed by Silicon Valley and New York, the Chicago tech sector is now stepping into the spotlight. <\/p>\n","protected":false},"author":7,"featured_media":8160,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[734,336],"tags":[707,706,483,726],"yoast_head":"\nWhy Chicago is Poised to Become a Global Tech Leader | BrainStation\u00ae Blog<\/title>\n<meta name=\"description\" content=\"The technology section in the Windy City has grown significantly over the last few years, and people are starting to notice. 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