As the new year gets underway, 2018’s fundraising numbers are rolling in, allowing us to get a snapshot of how the Midwest’s top startups fared. It was a good year for the Midwest, which we define here as Minnesota, Wisconsin, Illinois, Indiana, Michigan, and Ohio. Here is a list of each Midwest state’s top VC investment in 2018, in order of smallest to largest rounds closed.
Coming in at number 6, the largest VC investment in Wisconsin was in Propeller Health, with a $20 million round, led by AptarGroup, with participation from Safeguard Scientifics, Social Capital, Hikma Ventures, 3M Ventures, and SR One. The company planned to use the money to expand its medical treatments beyond asthma and chronic obstructive pulmonary disease (COPD). Just last month, however, Propeller was acquired by ResMed,a company that supports millions of people who suffer from respiratory disease. The addition of Propeller Health will help position ResMed as leaders in COPD patient management.
Ahead of Propeller Health is Indiana’s Scale Computing, which according to an SEC filing closed $21 million of a strategic funding round in October. Scale Computing uses machine virtualization and data analysis to help IT administrators scale their operations. This latest round was led by Lenovo. The companies are strategically working together in direct competition with VMware.
The largest VC deal in Michigan last year was an investment in Detroit-based StockX, a stock market of authenticity-guaranteed goods, like rare sneakers, watches, and designer clothes. StockX closed a $44 million round of funding that was co-led by Google Ventures and Battery Ventures. Also participating in the deal were Detroit Venture Partners and notable individuals like Salesforce founder Marc Benioff, rapper Eminem, and actor Mark Wahlberg.
Cracking the nine-figure mark is Columbus, Ohio’s Root Insurance. Root closed a $100 million Series D round in August that was led by Tiger Global, with participation from Redpoint Ventures, Scale Venture Partners, and others. Root uses machine learning to develop personalized insurance quotes based on individuals’ driving behavior and has received a great deal of investor interest. In addition to the $100 million round in August, the company closed a $51 million round in March.
In second place is Chicago’s Tempus Labs, which raised a $110 million Series E round last August. Tempus uses machine learning and health care data to provide actionable medical insights that drive better outcomes for individual patients. Baillie Gifford led the round, with participation from existing investors NEA, T. Rowe Price, and Revolution Ventures. The company plans to the use the investment to expand into non-U.S. markets and provide insights about other diseases. Tempus had previously announced an $80 million round of funding in March, bringing its total 2018 funding to $190 million.
Finally, at $200 million, the largest VC deal the Midwest saw in 2018 was Minnesota’s Bright Health. Bright Health is transforming the U.S. health insurance and health care industries by making them both more affordable and more accessible to individuals. Declaration Partners and Meritech Capitalwere new investors in this round, which included renewed backing from Bessemer Venture Partners, Greycroft, NEA, and Redpoint Ventures. The company will use the money to expand its offering to more markets and accelerate business growth.
The major investments we saw in these startups in 2018 further reinforce the Midwest’s expertise in industries like health care, insurance, and marketplaces. It will be interesting to see what these companies — and others emerging and gaining traction in the Midwest — do in 2019.
Originally featured in VentureBeat.