Join us online at COVERGENCE OCT 22-23
The University Tech/Startup Gap Fund and Accelerator Summit
- 20 in-depth gap fund/accelerator program reviews
- Breakout and group discussions on common challenges
- Corporate and Investor partnering panels
- Networking web-site and associated materials
Investors must like what they see among Hoosier technology companies, because they’re sure bringing in their dollars. Last year saw a serious uptick in investments from venture capital firms and other types of funding sources, and the new decade began with a bang that only held the trend.
2019 was one of the best years on record for Indiana technology investment. Funding totals amounted to an increase of more than 260% over the previous year, according to TechPoint, Indiana’s non-profit tech growth accelerator.
62 Indiana tech companies publicly announced funding infusions from sources like VC investments, grant awards, merger/acquisition agreements, private equity, and debt financing for a grand total of more than $358 million. There were about 33 mergers and acquisitions within the sector in that timeframe. The fourth quarter alone included 12 VC announcements and three grants for more than $151 million, and two of those announcements didn’t even include details on dollar amounts.
“Last year’s VC activity is a reflection of the smart investments that have been made here in prior years and serves as a harbinger of things to come,” said Mike Langellier, TechPoint president and CEO.
The investment totals have led Indiana to be ranked 4th among U.S. cities set to challenge Silicon Valley and Seattle for technology industry growth, according to data from Zillow, a real estate data company.
Interestingly, the totals are likely on the low side. TechPoint tracked its numbers using publicly available data, so there could be quite a few more undisclosed funding rounds among Hoosier tech firms.
Lots of Local Funding Sources
Many of the investments that came to Hoosier tech firms last year originated from within the state itself, notably in the last quarter. Indiana-based investors were very active with 10 firms taking part in investments. Elevate Ventures and High Alpha each made three investments in companies while other notable firms like Allos Ventures, Meridian Street Capital, Charmides Capital, VisionTech Partners and the Indiana University Philanthropic Venture Fund also made investments. In addition, a number of state-based angel investors made investments in Indiana tech companies.
The largest single deal of the year came from an out of state source. Community Investment Management of San Francisco, CA provided a $100 million investment to Indianapolis-based Kenzie Academy, a unique type of technology school. The funds will be used for student tuition financing, which will lead to more people acquiring technology skills needed by the industry. Additionally, the investment from Community Investment Management came just weeks after Kenzie Academy took in $7.8 million in Series A funding from ReThink Education and several other investors.
2020 Continues the Trend
On the heels of last year’s success story, the new decade began very well for tech industry investment. Right in the first two weeks of the year, 2020 saw three new growth announcements.
SIMBA Chain, a South Bend-based platform that enables users to rapidly implement decentralized applications for blockchain, announced it closed a $1.5 million seed financing round with venture capital and angel investors, including Notre Dame’s Pit Road Fund, Elevate Ventures, First Source Capital, and individual angel investors.
The funding will be used to hire additional sales and development personnel to accelerate market rollout and support initial execution of a number of major government contracts, including one with the U.S. Air Force to secure its supply chain on battlefields and at home. The technology underpinning SIMBA Chain was developed at Notre Dame and the company itself was founded by community partners and faculty.
Also at the start of the year, Indianapolis-based sales co-pilot software company Costello was acquired by Atlanta-based sales engagement platform SalesLoft. Together, the two platforms are a natural fit for one another. Costello’s platform has the ability to integrate all relevant sales information into one view, such as pipelines, calendars, metrics, and timelines. Combined with SalesLoft, the duo will help sales teams prospect while managing their days and their deals.
Just a few days after those announcements, Mimir, a software company that began as a Purdue University student startup, was acquired by HackerRank. Mimir is a cloud-based service that provides tools for teaching computer science courses. The company is based in Indianapolis and expanded its operations there last year. HackerRank is a popular platform for practicing and hosting online coding interviews.
Inbound investments are clearly a sign there is a lot of confidence surrounding Indiana’s technology sector. Year after year, research reports on the sector only indicate growth across employment, number of establishments, investment totals, and perhaps most importantly economic impact. All signs indicate this trend will hold well throughout the 2020s and should continue bringing big returns to the Hoosier state for the foreseeable future.