Excoastal #3
Happy Fathers Day, Anvl spins out of High Alpha, AI and blockchain bring in $, and more...
Welcome to Excoastal, a newsletter covering deals, startups, venture capital, and more from Chicago to Boulder, Detroit to Columbus, and beyond. I’m Evan Lonergan, a native Midwesterner.
This newsletter is the collision of my Chicago/Michigan roots and a love of all things startups and venture capital. It’s inspired by Brendan Boken’s excellent newsletter The Strand, which covers the thriving tech scene in LA. The catalyst for its creation was a VC University Live at the University of Michigan few weeks ago, where one of the focuses of the conversation was on building stronger startup communities in the Midwest. From what I’ve seen demonstrated by the #givefirst ethos here in Boulder, and from what I’ve observed across other tech hubs, strong communities are often the products of individuals who care enough to invest not just resources, but time and energy. Bringing it home, I wanted to do something to contribute to the ecosystems between the coasts, Excoastal is the start.
You can connect with me on Twitter @evanjlonergan, on Medium, and send deals/jobs/intel to evanlon92@gmail.com.
Whats New
I want to shout out Excoastal’s first 36 subscribers, the real OGs. Thanks for taking a chance on this newsletter, and letting me take up that valuable space that is your inbox. Quite a few of you are VCs, which leads me to this…
Is the Midwest missing out when it comes to VC?
According to the Brookings Institution, the Midwestern venture capital network, limited in size and scale, risks missing out as financing rounds increase in size and competitiveness. As things stand now, the Midwest is a net exporter of venture capital, but there’s no reason this should remain the case. Aside from already being home to more Fortune 500 companies and top research universities than any other region, the Midwest also has:
26% of the nation’s corporate and university patents
31% of U.S. university-based research and development, including 34% of highly competitive National Institutes of Health (NIH) research funding, the key to creating new drugs and medical technologies
35% of the nation’s total bachelor’s degree holders
33% of its STEM graduates,
32% of all higher education degrees awarded in the United States
However these stats don’t mean much, if the Midwest is unable to capitalize on its potential for innovation. We have the raw material inputs needed to spark innovation, and yet when it comes to outputs (measured in $ value of deals done) we lag behind CA, MA, and NY. The Brookings report chalks this gap up to the fewer number and smaller size of Midwestern VC firms, and proposes a regional fund of funds as a potential solution.
I see the Midwest rising, and expect this gap won’t exist in perpetuity. That said, I’m also willing to do everything I can to help close it faster. Have thoughts on the Brookings article or on the future of VC in the Midwest? Feel free to hit me up on Twitter.
And now to the good stuff…
Venture Capital Deals
Splash Financial, a Cleveland-based student loan refinancing startup, raised $4.3 million in venture financing from CUNA Mutual Group and Northwestern Mutual Future Ventures. Term Sheet
Kansas City-based Bellwethr, an automated predictive processes startup, has raised $2.5 million in Seed funding led by Royal Street Ventures with participation from Techstars, Stout Street Capital, the KCRise Fund and others.
Chicago-based digital media company 4FRONT raised an undisclosed amount of corporate financing.
BanQU, a Minneapolis-based blockchain company raised $1.4 million from Anheuser-Busch InBev.
Vestaron, a Kalamazoo, MI-based developer of biopesticides, raised $40 million in Series B funding. Novo Holdings led, and was joined by investors Anterra Capital, Cultivian Sandbox, Open Prairie Ventures and Pangaea Ventures. Term Sheet
Ag Startup Engine has made an initial investment into the Series A round of Ames, IA-based VetMeasure, a startup making a monitoring device for pets.
Chicago-based Brideside has raised $4 million dollars in a fifth round of financing.
Spring Labs, a company with offices in LA and Chicago and developing blockchain-based platforms to stop financial fraud has raised 23 million in Series A funding from led by GreatPoint Ventures along with GM Ventures, RRE Ventures, Pritzker Group VC, August Capital, Multicoin Capital, Galaxy Digital and CardWorks.
Lumavate, a Carmel, IN-based company that provides an enterprise platform for building progressive web apps has raised $3 million from investors including Elevate Ventures.
Indianapolis-based Anvl, a workforce safety software startup, has raised a $2.5 million Seed round from Rise of the Rest and High Alpha.
Edge Case Research, a Pittsburgh-based AI safety startup, raised $7 million led by Chris Urmson with participation from Lockheed Martin Ventures, Liberty Mutual Strategic Ventures, Trucks VC and Blue Tree Allied Angels. Axios
Springfield, MO-based Pay4Education, a startup helping consumers make informed college finance choices, raised $575K in a pre-Seed round. Springfield Venture Fund led the round, joined by Alchemy Group.
Private Equity Deals
CC Industries acquired Southern Towing Co., a Memphis, Tenn.-based inland tank barge operator, from Trive Capital. Axios
BBRC Private Equity, a Twin Falls, Idaho-based, made an investment in Plant Therapy, a Twin Falls, Idaho-based provider of essential oils and accessories. Term Sheet
American Construction Source, a Springfield, Mo.-based building materials company of Angeles Equity Partners and Clearlake Capital, acquired Minnesota-based Freeborn Lumber. Axios
Leonard Green & Partners, Ares Management and other co-investors have agreed to acquire Indiana-based healthcare solutions company Press Ganey from EQT according to Pitchbook.
TPG Pace, a blank-check acquisition company sponsored by TPG, agreed to buy Lemont, Illinois-based slot machine operator Accel Entertainment for $884 million. Axios
Going Public
Nashville, TN-based Change Healthcare filed for a $100 million IPO. - S-1
On The Move
Allison Weil joined Hyde Park Venture Partners as a senior associate. Term Sheet
GTCR has hired Melissa Mounce as a managing director with a mandate to find and recruit CEOs and other management talent for the Chicago-based firm's portfolio cos according to Pitchbook.
New Funds
Chicago based Origami Capital Partners is targeting $500 million for its fourth fund, which invests in complex/special situations. Buyouts
What I’m reading
Internet Trends 2019 from Mary Meeker
Setting the Salesforce/Tableau Acquisition in Context
Femtech Could Be the Solution to Medicine’s Male Bias
Institutional Contrarianism: On Everest, Mozart, and Instinctual Originality
Jump Starting America’s Technology Hub Map (Where the hubs are most densely concentrated- the Midwest)
I Wrote This on a 30-Year-Old Computer
Human Capital
Associate @ BIGR ventures (Boulder)
VP of Engineering @ Provi (Chicago)
Business Analyst @ ZX Ventures (St. Louis)
GM- Detroit @ Sonder (Detroit)
Strategy and Biz Ops Manager @ Duolingo (Pittsburgh)
Startup/VC Twitter
(I laughed so hard at this ^ 😂)
Podcast Addiction
The pros and cons of angel funds with Todd Federman - Upside
Jerry Neumann - Why Venture is Hard - Invest Like the Best
Culture Break
📚Read- Midnight in Chernobyl (Picked this up after watching the HBO series, incredible read)
🎬Watch- Catch 22 on Hulu
🎧Listen-
🧐Think- The Day the Music Burned and Keanu Reeves is Too Good for This World
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