Chicago-based venture capital funds raised a combined $7.42B in 2021, spread over 17 firms. That figure is a big jump from $977M raised by just three funds in 2016. Last year, 13 Chicago-based companies achieved unicorn status, bringing their ranks to 26. There were only eight in 2016. More: - The data comes from Pitchbook in partnership with World Business Chicago.
- The uptick comes after a long drought that saw the Midwestern city’s tech champions, such as Groupon, fall on hard times.
- Funding for the city’s startups dried up as investors could not identify a central sector that defined the region’s companies.
- Cities like Boston and Detroit are based on single industries (biotech and automaking, respectively), while Chicago has always been defined by multiple sectors, including agriculture and finance.
- Chicago’s startups are still a fair bit cheaper for investors compared to their East Coast and West Coast competitors.
- Moreover, having a headquarters in Chicago has become an advantage for attracting top talent and acquiring smaller rivals.
- The main driver of the boom has been a new interest in technology services companies, further buoyed by local universities such as Northwestern and the University of Chicago pumping out 24,000 STEM graduates per year.
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 Exotec's stacks. French robotics startup Exotec raised $335M Series D to bring its valuation to $2B. The round was led by Goldman Sachs’ Growth Equity with support from 83North and Dell Technologies Capital. Exotec provides an end-to-end partial automation logistics platform for regular warehouses. More: - The platform is based on Skypods, which are low-profile robots capable of bringing down and transporting vertically oriented bins from stacked racks, thus increasing storage density.
- The system is scalable, allowing warehouse operators to add stacks and Skypods to their system without starting from scratch.
- The basic premise of the platform is to allow companies of all scales to keep pace with Amazon’s highly automated logistics centers.
- The firm will use the funds to hire 500 engineers by 2025 and continue its push in North America.
- Current customers include Gap and Geodis, as well as Decathlon’s Montreal fulfillment center.
- Prior to this round, Exotec had raised $113M.
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 First-time funds in 2021 totaled 198, according to PitchBook data. That figure is on par with 191 in 2020 but a big step down from the 315 new funds in 2019. The news comes as U.S. VC firms alone raised $128B in fresh capital. More: - The difficulty with raising first-time funds seems tied to the tendency of established firms to raise vehicles with astronomical amounts, which ties up LPs’ capital.
- Moreover, the older firms can show long-term performance, meaning that an LP is hard-pressed to justify swapping out an existing manager for one lacking a track record.
- Some up-and-coming managers have seen themselves forced to lower their fund targets.
- Ed Fries, who founded gaming-focused venture firm 1Up Ventures after two decades as a video game executive at Microsoft, dropped his target from $1M to $100,000.
- The key is landing one big-name LP, which will be followed slowly but surely by other investors.
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Israeli cybersecurity company Pentera raised $150M, led by K1 Investment Management. The round added the company to the unicorn herd with a $1B valuation and saw participation from existing investors Insight Partners, AWZ Ventures, and Blackstone and new investor Evolution Equity Partners. More: - Formerly known as Pcysys, Pentera provides a platform that tests an organization's entire IT infrastructure. It then uses the revealed risks to create a surgical remediation plan with continual security validation.
- The company's annual recurring revenue hit $7M in Q4'21 and enjoys 95% gross profit thanks to its non-existent support functions.
- Customers include GAP, video game company EA, Blackstone, and others.
- Since a $25M funding round in Sept. 2020 at a valuation of $200M, the company has grown its employee base from 60 to 160, of which 90 are based in Israel.
- With $190M raised to date, the 2015-founded company is looking at an IPO in 2024.
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Best of Last Week M&A - Take-Two Interactive has agreed to buy mobile game developer Zynga for $12.7B in cash and stock.
- Auto parts company Aptiv will acquire enterprise SaaS provider Wind River from current owner TPG Capital for $4.3B cash.
- Tencent Holdings may acquire Black Shark, the Chinese gaming headset maker, for $470M.
- nCino, a cloud banking platform provider, acquired SimpleNexus, a cloud-based, mobile-first homeownership software company, for $270M.
- Doctor appointment booking platform Doctolib acquired secure data platform for healthcare operators Tanker for an undisclosed sum.
- Coinbase announced the acquisition of CFTC-regulated derivatives exchange FairX.
- Jitterbit, an API transformation company, acquired PrimeApps, a Turkey-based low-code application development service, for an undisclosed sum.
IPO New Funds - The crypto derivatives exchange FTX has announced its launch of a new $2B venture capital fund that will invest broadly across crypto and Web3.
- Kleiner Perkins has raised $1.8B in funding across two funds as it celebrates its 50th year in business. Kleiner will distribute $800M into its early-stage venture fund, KP20, and $1B into Select2, a fund focused on "high inflection investments.
- Qiming Ventures is reportedly shopping a $1.2B China-focused fund to potential U.S. LPs. The fund could be one of the largest of its kind. Success would signal a bullish view of China from U.S. investors.
- Bill Gates-backed Breakthrough Energy Catalyst (BEC) is looking to pump $15B into cleantech investments.
- Khosla Ventures has raised $550M for its first Opportunity Fund.
- Owl Ventures raised three new funds for its edtech-focused investment strategy: a $640M fifth flagship fund, a $270M second opportunities fund, and several special purpose vehicles with $100M.
- OSF Ventures launches its third fund with a $100M target to invest in companies working to improve patient care and operational efficiency.
- Decentral Ventures raised a $75M fund focused on DeFi with return support from past LPs.
- Pantera Capital, a U.S.-based hedge fund managing $6.4B in blockchain-related assets, has raised $63.7M in funding for its Bitcoin Feeder Fund.
- College student-led venture capital initiative Dorm Room Fund has closed on a new $10.4M fund, its largest ever.
- Launch House, the organizer of month-long programs for entrepreneurs, raised $10M to invest in companies that complete its program.
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 Today's Funding 💸 Biotech/Health - MyCoWorks (San Francisco, Calif.), new mycelium materials: $125M C led by Prime Movers Lab, participation from SK Networks, Mirabaud Lifestyle Impact & Innovation Fund.
- DexCare (Seattle, Wash.), intelligent orchestrations platform for digital demand and health system capacity: $50M B led by Transformation Capital, participation from Kaiser Permanente, Providence Ventures, Mass General Brigham, Define Ventures, et al.
Blockchain - Giddy (Draper, Utah), mobile app that enables mainstream DeFi adoption: $8M Seed from Pelion Venture Partners, Blake Murray, Derek White, Jeremy Andrus, Scott Paul, Brand Whisperer Shaun Neff, et al.
Consumer - Fan Controlled Football (Los Angeles, Calif.), professional sports league that empowers fans to make key decisions for their favorite team: $40M A led by Animoca Brands, Delphi Digital, participation from Gemini Frontier Fund, 6th Man Ventures, Jump Crypto, et al.
Data/Analytics - Verana Health (San Francisco, Calif.), database of real-world clinical evidence: $150M led by Johnson & Johnson, Novo Growth, participation from GV, Merck Global Health Innovation Fund, Casdin Capital, Brook Byers, THVC, Breyer Capital.
- Daasity (San Diego, Calif.), e-commerce analytics and data: $15M A led by VMG Catalyst, participation from Cove Fund, Exeter Capital, 1855 Capital, Mooring Ventures, Okapi Venture Capital, Serra Ventures.
Enterprise - Accrue Savings (New York, N.Y.), merchant-embedded shopping experience that rewards consumers for saving: $25M A led by Tiger Global, participation from Aglaé Ventures, Maple VC, et al.
Fintech - Float (Ghana), credit lines for businesses: $17M Debt/Equity from Cauris, Tiger Global, JAM Fund, Justin Mateen.
- Payflow (Barcelona, Spain), salary-advance fintech: $9.1M A led by Seaya Ventures, Cathay Innovation, participation from Force Over Mass Capital, Y Combinator, Rebel Fund.
- Zowie (Taipei, Taiwan), customer service automation platform: $5M led by Gradient Ventures, 10xFounders, participation from Jack Altman, Markus Giesswein, Inovo Venture Partners.
Foodtech - Yumi (Los Angeles, Calif.), science-backed meals, snacks, and vitamins: $67M from Lydia Jett, Desiree Gruber, Kelly Coffey.
Gaming - Rooter (Mumbai, India), game streaming and e-sports platform: $25M A from Lightbox, March Gaming, Duane Park Ventures.
- GXC (Jeju, South Korea), game ecosystem platform: $9.1M led by KNET Investment Partners, participation from Korea Development Bank, Tiger Asset Management Discretionary Invest, Vision-Creator, Megazone.
Legaltech - Juro (London, U.K.), browser-based contract automation platform: $23M B from Eight Roads, Union Square Ventures, Point Nine Capital, Seedcamp, Taavet Hinrikus.
Robotics Did you enjoy reading about all of today's funding in one place? The funding roundup is only available to free users on Mondays and Fridays. Upgrade to Inside VC Premium for either $10/month, or $100 billed annually, to receive the full list in every issue! For a limited time, we are offering a 14-day free trial. Click here to sign up! | | | |
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- Swedish social robotics company Furhat bought Misty Robotics, a crowd-funded personal robot producer, for an undisclosed sum.
- Tech analyst Fais Khan analyzed the returns of Web3 tokens, coming to the conclusion that VC-backed coins consistently underperform. Are VCs taking profits at the expense of retail investors?
- Shanea Leven, co-founder and CEO of developer platform CodeSee, explains why social progress is more important than technological advancement, and why raising funds as a Black female founder is still so hard.
- FinDev Canada has invested $13M into Energy Entrepreneurs Growth Fund, which invests in early and growth-stage energy startups in sub-Saharan Africa. That brings the fund’s AUM to $120M.
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 |  | Inside VC's writer/curator Stephen currently lives in Berlin and is pursuing a Master's degree in philosophy. He otherwise spends his time trying his hand at recipes from India and Southeast Asia, escaping it all at the kickboxing gym, and offending aural sensibilities with his band. |  | | Editor | Aaron Crutchfield is based in the high desert of California. Over the last two decades, he has spent time writing and editing at various local newspapers and defense contractors in California. When he's not working, he can often be found looking at the latest memes with his kids or working on his 1962 Ford. | |
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