Lead Bank and investment research firm CB Insights recently analyzed the Midwest tech investing scene and distilled their findings into a report.
The nearly 40-page report looks at investment trends, performance, major players and more. Here are five takeaways from the report.
1) The Midwest accounted for a small piece of the national tech investment pie. In 2014, Midwest tech companies raised about $4.4 billion in funding — in 874 deals — out of $47 billion in the U.S., accounting for about nine percent. 2015, however, appears to be keeping pace with 2014, according to the report. Dollars invested are projected to reach almost $5.3 billion by year-end at the current run rate. Total deal activity is trending toward flat or a slight decrease in 2015 with a projected 856 deals.
2) Kansas City is lagging behind St. Louis in deal activity in the last 15 months and by a pretty substantial amount. St. Louis tech firms snagged 36 investment deals since the first quarter of 2014, compared to Kansas City’s seven. But while St. Louis companies nabbed more deals, Kansas City companies as a whole raised more capital — $43.3 million — than St. Louis’ $40.8 million. Both cities, however, were surpassed by Maryland Heights, a city outside of St. Louis, whose companies raised $72.6 million.
3) Since 2010, Missouri tech investment has ranked No. 4 in total dollars invested. Companies in the Show Me State have raised about $1.13 billion in capital via a total of 168 deals. Kansas ranked No. 5 in total amount of dollars invested, but raised significantly less at $591 million via 79 deals. Texas and Illinois topped the list, with $6.8 billion invested and $5 billion, respectively.
4) Internet and mobile companies in the Midwest raised the most investment dollars in 2014. The Midwest’s Internet sector commanded about 57 percent of investment dollars in 2014, accounting for about $2.5 billion. The mobile/telecommunications industry raised about $1 billion in 2014, or 23 percent of tech dollars invested.
5) Financial and Ag tech are booming with investors nationwide. The financial tech industry has experienced funding growth of 34 percent in the last year with more than $13.8 billion invested since 2014. Ag tech has seen funding grow by 183 percent with more than $282 million invested last year.