While other metropolitan areas get more attention for their tech scenes, Chicago has quietly become a hotbed of innovative start-ups. Thanks to half a dozen colleges minting tech-savvy graduates, several incubators protecting fledgling companies until they're ready to go out on their own and an impressive roster of angel investors and venture capitalists, the city is officially a start-up hub.
A handful of these companies have grabbed headlines, such as daily-deals website Groupon, which had a near-$17 billion IPO in 2011; and online-payments platform Braintree, which eBay acquired for $800 million in 2013.
But in recent years a host of other, lesser-known companies (for now) have sprung up across various tech sectors. According to venture capital database CB Insights, Chicago companies raised a total of $4.6 billion in 368 investment deals between 2009 and 2014. Below, check out seven start-ups, all of which boast breakthrough technology and have landed significant funding, that are heating up the Windy City today.
—By Will Yakowicz, special to CNBC.com, Inc. reporter
Posted 24 March 2015
The American farmer now can tap the power of big data and mobile analytics, thanks to 640 Labs. The company's 3-D-printed 640Drive widget plugs into tractors and other equipment, collecting data and sending it to a smartphone app that tracks a farm's performance to improve efficiencies. The start-up, which was acquired in 2014 by The Climate Corp. (a division of Monsanto) for an undisclosed sum, uses an algorithm to provide recommendations on the types of seeds to plant and offers tips on harvesting techniques.
When you schedule a meeting with someone you don't already know, Charlie's eponymous app combs through thousands of online sources to create a one-page description of the person, complete with work history and what you two have in common.
Incubated by DreamIt Ventures and 1871, the 3-year-old company has received $1.75 million in backing from Hyde Park Venture Partners and Lightbank and now has 25,000 users.
Riding the wave of the $1.4 billion fantasy sports market, Fandium's app aggregates text, photos and videos that fans post on social media when they're in and around sports stadiums. Users can follow other fans, track up-to-the-minute scores and make friendly wagers on game outcomes.
Founded in 2013, the company has received $1.25 million from angel investors and is now raising a $750,000 round in part to develop its app for Android devices.
Few elements of city life are more aggravating than trying to find a parking space. SpotHero, which has partnered with private garages and lots in 12 cities, including Chicago, New York and San Francisco, makes locating a spot as easy as pushing a button on its app and driving to the destination. Users get discounted fees at the parking facilities and can pay through the app.
SpotHero has gotten $7.5 million in funding from Techstars and other VCs.
Snapsheet has pulled off the near-impossible task of making car accidents a little less unpleasant, significantly easing the insurance claims process. Claimants just take a photo of their fender bender, send it to the insurer using the company's app, and get reimbursed via direct deposit.
Backed by Lightbank, Pritzker Group Venture Capital, Commerce Ventures and OCA Ventures, Snapsheet has raised $10 million to date. The company has signed agreements with insurers, including MetLife and National General, and has plans to expand into property damage claims.
Options Away uses options-trading technology to change the way people buy plane tickets. For a small fee, the start-up's website allows users to lock in a low fare for up to two weeks while they decide whether to book. (A one-day option costs $4, while a 14-day option costs $50.)
Since its 2012 launch, Options Away has raised $5.6 million in funding from investors, including Thayer Ventures, Pritzker Group Venture Capital and former American Airlines CEO Donald Carty.
One of the fastest-growing start-ups in Chicago, Raise.com is a peer-to-peer marketplace where users can buy and sell gift cards and store credit from retailers ranging from Walmart and Target to Gucci and Louis Vuitton. With $81 million in venture capital from New Enterprise Associates, Bessemer Venture Partners and others, Raise grew its revenue by 500 percent from 2013 to 2014.
The company does not disclose annual revenue totals, but since its 2013 founding, it has already made a major mark in the $100 billion-plus gift card market.