We all know Chicago’s reputation when it comes to startups and funding: Chicago has an emerging tech scene that’s proving capable of sprouting successful industry-changing startups, yet it falls behind places like New York LA, Boston, Seattle and Austin as a tech hub.
Chicago–the third largest city in the US–often punches below its weight, so the narrative goes, and should be attracting more funding, creating more pillar tech companies, and seeing more billion-dollar exits.
While a lot of metrics go into whether or not a city is good for tech, one metric seems to turn Chicago’s reputation on its head: exits. In fact, over the last five years Chicago’s top tech exits have totaled more than Boston, LA and Seattle, and are in-line with the exits seen in New York, according to newly published data by Hyde Park Angels and Pitchbook.
Thanks to Grubhub’s IPO in 2014, Gogo’s IPO in 2013, Cleversafe’s $1.3 billion sale to IBM, and a handful of other $800 million+ exits, Chicago’s top 10 tech exits have totaled $10.7 billion over the last five years.
Here’s how Chicago’s top exits compare to other large cities over the last five years.
“Interestingly, the narrative seems to be that coastal cities singularly have better exits than the Midwest, but the numbers show this isn’t true,” Alida Miranda-Wolff, director of platform at Hyde Park Angels, said in an email.
The report includes data through 2016, so it doesn’t account for LA-based Snap’s IPO from earlier this year. And cities like New York have some other major exits in the pipeline, like Blue Apron’s planned IPO.
But still, Chicago appears to hold its own when it comes to recent tech exits, which may come as a surprise to some tech watchers who have overlooked the city. One reason could be that Chicago tends to produce B2B companies that are less recognizable, and get far less media attention, compared to consumers startups like Etsy and Dollar Shave Club.
“I think the story of Chicago as a leader in exits gets lost for a few reasons,” Miranda-Wolff said. “One, with exceptions like Grubhub, a good deal of our successful exits are in the enterprise space, which means there isn’t the same company name recognition that you might see with consumer companies. Also, while we do have companies that exit for huge sums quickly, largely what we see is long roads to success like Fieldglass, Trustwave, and Cleversafe. Those companies grew steadily over time to what they were.”