Over the last 12 months, Minnesota’s tech and startup scene saw a number of exciting headlines, including several big M&As and record-breaking venture capital rounds. It was an interesting year for the local startup ecosystem. Now it’s time to look ahead to 2018.
While making this list, we focused on how these organizations have grown, and what they could potentially accomplish in 2018. Did they raise a big round of funding this year? Grow their team? Expand to a new market?
Some of these startups listed below will be familiar. You’ve probably already been keeping an eye on them, and plan to continue doing so in the future. Others on this list will be new, but worthy, additions to your startup watchlist.
Here is our list of 2018 startups to watch, listed in alphabetical order:
Started by Code42 co-founder Mitch Coopet, Aftercode uses artificial intelligence to create workflow actions from meetings. There are a few special things about Aftercode aside from its leadership, which also includes Josh Cutler, the former CEO of AI consultancy Deep Machine. First, it’s a growing AI startup located in the Twin Cities, which typically isn’t considered one of the area’s tech specialties. Aftercode also raised a $2.1 million seed round this year from three Midwest-based VCs.
Bind Benefits & Bright Health
So maybe we’re cheating a bit by tossing these in as a two-for-one, but both of these “on-demand” health startups are worth keeping an eye on. Founded by serial entrepreneur and venture capitalist Tony Miller, Bind Benefits allows its members to adjust their coverage as they need services. The startup closed on $2.5 million in funding in July.
Bright Health made headlines this summer with its $160 million round of funding, likely the largest in Minnesota history. Over the next few months, the insurance startup expanded into new markets and acquired Minneapolis digital-marketing agency Spyder Trap.
With experienced founders and fresh rounds of funding, both insurance-tech startups are likely to make big moves in 2018.
Bite Squad & Foodsby
Two Minneapolis-based food-delivery startups expanded their geographic footprints in 2017. Earlier this year, Bite Squad acquired 17 smaller restaurant-delivery companies from across the country. The company said that this was part of a strategy to consolidate the food-delivery marketplace and expand its reach into more than 30 areas across the U.S.
Foodsby, a food-delivery startup that targets office buildings, closed on a $5.9 million Series A in March. The company planned to use the funding to ramp up hiring and, like Bite Squad, expand into new cities.
Branch Messenger has been making waves since the startup moved from California to Minneapolis after participating in the first Target + Techstars accelerator in 2016. During its first full year in Minnesota, Branch Messenger, which makes software for managing hourly workers’ schedules, raised around $10 million in venture capital.
After landing $6.8 million of that in August, Branch Messenger CEO Atif Siddiqi said that the company planned to use part of the funding to double its headcount. This most recent funding round was lead by Santa Monica, California-based March Capital Partners. CrossCut Ventures, Techstars Ventures and Minneapolis-based Matchstick Ventures (a fund managed by Target + Techstars director Ryan Broshar) also participated. After an exciting first year in the Twin Cities, we’ll be watching to see how Branch Messenger continues to expand in the local startup scene.
Great North Labs
Great North Labs is a new incubator started by NativeX co-founders (and twin brothers) Ryan and Rob Weber that aims to train aspiring entrepreneurs and college students. Both brothers are experienced entrepreneurs and investors, but what’s interesting about their new venture is its regional focus: Greater Minnesota.
Great North Labs has two offices, one of which is in St. Cloud, where there are typically fewer resources for startups than in the Twin Cities. The incubator is looking to mentor and invest in startups located in areas like St. Cloud that might not be considered tech hubs. Rob Weber recently told Minne Inno that Great North Labs is in the process of raising its first fund. He added that the incubator aims to invest in around 30 startups in the Great Lakes region over the next several years.
Loup Ventures is a seed-stage venture capital fund focused on backing virtual reality, augmented reality, artificial intelligence and robotics startups. Founded by three former Piper Jaffray analysts, Loup Ventures started raising $20 million for its debut fund in 2017, and has made investments in four startups since its launch nearly a year ago. The firm has offices in Minneapolis and New York City. Heading into 2018, we will continue to follow Loup’s investments, paying special attention to any in the Twin Cities.
Osborn 370, the rebranded former home of Ecolab, technically isn’t a startup, but it’s well on its way to becoming St. Paul’s central tech hub. Earlier this year, the 20-story building was purchased for $3.6 million by a group of investors looking to boost St. Paul’s startup scene. We’ve received several small newsy tidbits about the project since then, including a short list of tenants and a glimpse at some temporary signage. In 2018, Osborn 370 is expected to continue adding tenants and open its co-working space, which could become a major startup resouce for St. Paul techies.
Upsie, a startup that helps consumers buy and track warranty plans, was one of two Minneapolis startups to participate in this year’s Target + Techstars retail accelerator. There’s been more attention surrounding Upsie after its Techstars run, so it’s likely we can expect more growth and a potential round of seed funding in the coming year.