The nation’s No. 1 downloaded parking app. A tracking service that helps parents locate their kids, even their pets. A risk management service that just raised $115 in venture funding. What do these disparate, yet successful enterprises have in common?
All three were hatched from Techstars Chicago, the premier business accelerator in a city widely known for its vibrant startups, accelerators and incubators. The three-month program at Techstars provides up to $120,000 in funding and connects up-and-coming entrepreneurs with tech mentors, capital, office spaces and abundant benefits and perks.
According to the newly-formed TECHicago, the Windy City is home to over 6,150 tech companies, and in the last five years alone over 375 startups were founded. The city currently boasts the highest percentage of women-owned startups anywhere in the world.
That thriving ecosystem is supported by a network of more than 200 “innovation hubs,” an idea that has come to include incubators, accelerators, co-working and maker spaces.
Chicago native Desiree Vargas Wrigley, a Techstars Chicago grad, serial entrepreneur, and now executive director of TechRise at P33, a new minority-focused incubator, knows the Chicago ecosystem bottom to top.
“Since I went through Techstars in 2010, our city has just exploded with this vibrancy around startups, and it’s incredible to watch,” says Wrigley.
“Whether you’re a tech person wanting to work at a startup, or you are a founder looking for technical co-founders and other people to work on your business, I think our city is one of the best cities in the world for getting started, because there are just so many resources available. You can find them at incubators and at our colleges and even in some of our neighborhood programs.”
Focus on Minority Entrepreneurship
P33 is so named because the goal is to “reclaim” the technology crown the city wore when it hosted the 1933 World’s Fair by the time of the city’s bicentennial in 2033. More prosaically, it is an initiative to strengthen Chicago’s technology and innovation leadership.
“We plan to make Chicago a magnet for technology’s next era of creators and generate opportunity across all industries for everyone living in our city,” said Gov. JB Pritzker at the organization’s opening in 2018.
TechRise at P33 was launched in February 2021 as a multi-stake initiative whose goal is to deploy $5 million in non-dilutive grant funding for early-stage Black and Latinx tech founders.
“By increasing funding to Black and Latinx entrepreneurs, Chicago can ultimately help narrow the wealth gap for our community, generate thousands of tech-related jobs for Black and Latinx citizens, and trigger millions in additional funding for diverse founded businesses,” said P33 co-founder and co-chairman Penny Pritzker, former U.S. Secretary of Commerce, a noted Chicago businesswoman and sister to the governor.
P33 established TechRise in conjunction with partners Verizon and 1871, the venerable incubator that anchors the startup scene at Chicago’s Merchandise Mart.
“We bring together capital, knowledge and networks to make sure that our Black and Latinx founders can have the best chance possible for creating sustainable businesses and generational wealth,” says Vargas Wrigley, the executive director.
“We’re thinking about how we can bring together corporate philanthropy and institutional philanthropy, high-net worth individuals, founders and investors, and collectively become the friends and family for diverse founders so that we can have more parity in our tech ecosystem.”
Record Growth for “Unicorns”
Founded in 2012, 1871 describes itself as a supporter of “early stage, growth stage and corporate innovators building extraordinary businesses, from idea to Fortune 50.”
That sense of destiny reflects the vision of serial Chicago entrepreneur Howard Tullman, who joined 1871 as CEO shortly after its founding and served until the end of 2017.
Tullman has come to view Chicago as favorably distinct from rival, coastal startup scenes.
“In Chicago, we’re building solid businesses that are revenue first, focused on becoming profitable and sustainable, and then folding them into bigger organizations,” Tullman told this magazine. “And that doesn’t happen, frankly, on either coast.”
“The real needle mover,” Tullman observes, “is not a startup, but taking the startup culture, the startup technology, the new ideas, and helping to make our big corporate partners more globally competitive and more successful.”
But Chicago startups, while happy to join forces with the big players, have proven adept at thriving on their own. As Forbes magazine reported in 2021, 11 Chicago startups went “unicorn” in the first half of the year, each having been valued at more than $1 billion.
“This record pace of companies achieving unicorn status,” Forbes reported, “is just another proof point that the Windy City’s startup ecosystem is quickly emerging as one the top startup ecosystems in the country.”
And the world is taking notice, witness the latest Techstars cohort of 12 startups, announced in July, which includes enterprises not only from Chicago and other parts of the Midwest, but also from England and Israel. Tel Aviv-based Kichezz is an online kitchen showroom that helps brands to grow by using data-driven advertising. Equipt, based in London, is a skills development company that connects potential employees to jobs from leading businesses.