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5 Companies to Watch in Silicon Prairie

Pamela Moore | E+ | Getty Images

This past year, I was introduced to the Silicon Prairie when I hosted Big Omaha and spoke at Thinc Iowa. What's the Silicon Prairie you ask? It's just the hottest area in the country for tech startups that you never heard of.

(Read more: Midwestern Startups: The Rise of Silicon Prairie)

Spanning from Nebraska to Iowa to Missouri, Silicon Prairie companies are gaining national attention. From financial tech startups like Dwolla in Des Moines, Iowa, to business-to-business software companies like Hudl in Lincoln, Nebraska, Middle America is putting itself on the map when it comes to entrepreneurship.

"It's not yet an established center of innovation," says Danny Schreiber, editor of Silicon Prairie News, which covers startups in the region. "So that means being a part of it also means being a part of a movement."

Venture capitalists and angel investors alike are taking notice. Top firms like Union Square Ventures, Dundee Venture Capital and Andreessen Horowitz have invested in the region — and the interest will likely only continue to grow.

Entrepreneurs in the region cite numerous advantages to operating in the Silicon Prairie. These include the lower cost of running a business, the high quality of life and the Midwest work ethic that allows startups to take a long-term approach to business.

Sure, it's not exactly easy to catch a direct flight from Cedar Falls, Iowa, to New York City or San Francisco. But then again, a major benefit to Prairie-based companies is being near major hubs of labor talent like Minneapolis and Chicago.

To give you a better look at what's brewing in the Silicon Prairie, here are five companies to look out for in the coming year.

1. Goodsmiths

Goodsmiths is an e-commerce marketplace where shop owners list their handmade or vintage items at no cost. Owners pay a transaction fee, lower than that found at other handmade marketplaces, for each sale. Based in West Des Moines, Iowa, Goodsmiths also created a social network inside the e-commerce engine, allowing its users to connect with each other.

"The Silicon Prairie is one of the largest untapped talent and resource pools in the United States," says Goodsmiths CEO James Eliason, who sees his company's location as an advantage. "There are over 20 million residents of the Silicon Prairie who are very loyal and passionate about brands and companies they use."

2. RareWire

RareWire is a software company that creates native apps for mobile devices. The Kansas City, Missouri-based company has built apps for The Atlantic magazine, Forever 21 and Johns Hopkins University. Earlier this year, it launched its original App Creation Studio, which allows companies to create their own mobile apps.

"I believe you'll see an explosion of technology innovation coming out of Silicon Prairie in the next few years," says RareWire President Kirk Hasenzahl, who believes his company is part of a growing movement.

(Read more: How Lack of Immigration Reform Harms Startups, US Economy)

3. Banno

Banno helps financial institutions mine banking data to drive growth and customer retention. Based in Cedar Falls, Iowa, Banno provides solutions to over 300 financial companies. It recently introduced a white-label product that institutions can use to brand and offer an app to their customer base.

"Startups in the Silicon Prairie have a bootstrap mentality, regardless of if they've raised money," says Banno CEO Wade Arnold, pointing out what sets this region apart. "This enables a longer runway and a focused team."

4. Stackify

Kansas City, Missouri-based Stackify solves the problem that many developers encounter getting access to servers in production data centers. Stackify allows developers to gain key access to information on servers -- without making any changes to the servers -- to manage and troubleshoot companies' databases.

"The biggest challenge (in the region) is raising capital," says Matt Watson, founder and CEO of Stackify, agreeing with Arnold. "But not due to a lack of capital. The problem is getting all the investors to work together and do more seed capital type investments.

(Read more: Global Entrepreneur Trends: Americans More Upbeat, Older)

5. Social Money

Social Money, based in Des Moines, Iowa, creates FDIC goal-saving products for banks, merchants and other industries. These products provide a social networking strategy to engage customers and create new revenue streams.

"The primary benefit of having a business [in the Silicon Prairie] is the people," says Social Money co-founder Jon Gaskell. "They are extremely talented, and they work extremely hard."

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