KANSAS CITY MINNEAPOLIS FIG. 13 Minneapolis seed- and early-stage VC deal activity Kansas City has had a lot of success recently in the govtech space. Replica, PayIt, Daupler, OpenCities and the recent 66 acquisition of NIC are all examples of that. All have enjoyed 52 great traction nationally, raised early money locally and brought 48 48 51 in large follow-on funding from top tier VCs as they gained 43 42 46 momentum. We’re also seeing an uptick in industrial tech 36 35 38 companies scaling and raising early money locally, including 8 Kansas City-based angels. Super Dispatch, Labor Charts and 3 2 7. . . 6 Kenzen are just a few examples. 9 1 2 3 129 $ 9 3 6 . $1 . . 8 0 . .1 .6 $ 2 3 . . 1 1 2 1 4 6 0 C2FO has raised more than $300 million from top venture firms 24 28 20 43 61 188 2 3 and is now a global company that started in Kansas City. The $ $ $ $ $ $ $ $ same is true for NIC, which was recently acquired for $2.3 billion. 1 2 3 4 5 6 7 8 9 * Both companies have recruited talent from the coasts. Brad Feld 1 1 1 1 1 1 1 1 1 20 1 20 20 20 20 20 20 20 20 20 20 02 once wrote that venture was following companies wherever they 2 were located. COVID really blew the lid off of that. VC firms are Deal value ($M) Deal count starting to realize they need to look for companies anywhere and everywhere, and companies are starting to realize the same Source: PitchBook | Geography: Minneapolis for new talent. This will change everything, and ecosystems like *As of September 1, 2021 Kansas City can benefit as a result. eed- and early-stage Minneapolis startups have raised at least LESA MITCHELL $200 million of VC in six of the past seven years. The lone General Manager, Techstars Sexception, 2019, saw $188.6 million raised, making the $200 million level a fair baseline for the ecosystem. FIG. 12 Kansas City seed- and early-stage VC deal activity 29 Our market has grown considerably over the last few years, and we have a lot of factors to thank for that. The Twin Cities are home to the highest ratio of Fortune 500 companies per capita 21 19 20 19 21 20 of any city in the country. On the healthcare side, we’re home 18 17 to UnitedHealth Group, the Mayo Clinic, and Medtronic, among 15 others. Other names include Best Buy, Target, 3M, Cargill, and US Bank. That strong corporate foundation has allowed healthcare 9 10 and enterprise software startups to flourish here. 8 8 2 .7 .7 3 6 .6 20. 0 6. 4. . .6 7. 4 $ The University of Minnesota is also one of the strongest colleges 1 6 5 7. 8. 13 4 42 3 3 3 8 4 6 in the country in life science and biotech innovation, thanks to $ $ $ $ $ $ $ $ $ $7 programs such as the University Enterprise Labs. 1 2 3 4 5 6 7 8 9 * 1 1 1 1 1 1 1 1 1 20 1 20 20 20 20 20 20 20 20 20 20 02 Minnesota is a beautiful state, and people who move here 2 appreciate the surroundings. Many families choose to split their Deal value ($M) Deal count time between the Twin Cities and a second lake home within a Source: PitchBook | Geography: Kansas City two- or three-hour drive of the city. With remote work more widely *As of September 1, 2021 accepted post-COVID, many employees are spending upwards of three–four days a week working from their cabins. That’s a natural draw for entrepreneurs and the ecosystem as a whole he Kansas City ecosystem is in its early stages of development going forward. but has the ingredients to emerge in the coming years. Seed and Tearly-stage VC deal volume is consistent every year, hovering around 20 rounds on an annual basis. Between 2012 and 2016, ROB WEBER combined seed- and early-stage value was consistently below $50 Co-founder and Managing Partner, Great North million, notwithstanding an outlier record year in 2011 of $136.8 million. Ventures More recently, between 2017 and 2021, three years have seen at least $65 million in combined funding. Through early September, 2021 is on pace to be Kansas City’s second-highest on record. 8 / Beyond Silicon Valley: Coastal dollars and local investors accelerate early-stage startup funding across the US