"VC firms in the city, the nation, and around the globe should take note; Chicago’s startup system is primed to be a world leader."
Home to corporate behemoths like Walgreens and State Farm, Chicago has long been an industrial hub. Recently it’s become a unicorn factory as well. In 2021, 12 Chicago-based startups reached over $1 million in valuation, bringing the total numbers of unicorns to come out of the ecosystem so far to 20.
Chicago startups raised $7 billion across 372 venture deals in 2021—by far the highest total for the ecosystem since PitchBook began tracking such statistics in 2006. New funds also emerged here in 2021, including LongJump, CAST US by Cleveland Avenue, and TechRise by P33.
Logistics platform ShipBob raised $200 million at Series E in June 2021, peer-to-peer review company G2 raised $157 million at Series D the same month, and marketing and sales automation platform ActiveCampaign raised $240 million Series C in April 2021.
Chicago’s startup scene is notably diverse. Women founders raised over $257 million in 2021, nearly triple the $80 million raised in 2019. The median deal size rose from $2.5 million in 2019 to $8.5 million in 2021. The same year, TechRise awarded nearly $1 million in seed funding to more than 42 early-stage Black- and Latino-founded startups. In February 2022, highly regarded incubator 1871 launched a new accelerator program for Black-owned businesses, and a month later LongJump, a first-check venture fund that invests in Chicago’s underrepresented founders, made its first investments. Notable startup events include the annual TECHSPO Chicago, and 2022 sees the city hosting the Venture Capital World Summit.
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Reasons to Move Your Startup to Chicago
Chicago has earned a reputation as being one of the best cities for female entrepreneurship. Approximately 30% of Chicago-based startups have either a woman or person of color as a founder or CEO, and the ecosystem has the largest percentage of female startup leaders in the U.S. At least eight Black-led or founded startups raised significant funds here in 2021.
The greater Chicago region is home to some of America’s best MBA and engineering programs, which provide a talent pipeline for local businesses. The University of Chicago, Northwestern, Loyola University, DePaul University, and Columbia College all run popular entrepreneurial programs. The program at Northwestern’s Kellogg School of Management, The Garage, is currently incubating more than 60 student-founded startups. The City of Chicago works with local universities through programs including P33 to connect talent to job opportunities.
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