You’ll hear a lot about the ‘Fortune 500’ in Minnesota wherever you go, but aside from #72 Best Buy (which has “turned around” by losing 6 billion dollars in value since 2010) there are are no actual tech companies on that current list of 17 headquartered here.
Looking beyond that roster for our state’s top tech firms — the true leaders, the anchors of industry, the globally competitive — what do we have here?
In seeking answers to the above, an alarming trend has surfaced around the class of publicly traded tech firms in Minnesota:
The picture is not just a changing landscape, it’s rapidly a disappearing one.
Here’s a list of former Minnesota public tech companies that have moved headquarters, gone private, or just died since 2010:
- Digital River – Acquired ($840m) and privatized by NY HQ Siris Capital in 2015
- Wireless Ronin – Merged and privatized by NJ HQ Creative Realities in 2014
- Digital Angel – NASDAQ delisted in 2010
- Navarre – Merged with Speed Commerce and moved HQ to Dallas in 2013
- Lawson Software – Acquired and Privatized by Infor & Golden Gate Capital for $2b in 2011, moved HQ to New York.
- Hickory Tech – changed name to Enventis in 2013, acquired by Illinois HQ Consolidated Communications in 2014
- MakeMusic – Acquired by Peaksware ($15m), privatized, and moved HQ to Colorado (-120 jobs) in 2013/2014
- Hutchinson Technology sold to TDK for $126m
- Analysts International – bought for $35m in 2013 by Georgia-based ACS
- XRS/Xata Road Science – Acquired and privatized by Dallas HQ Omnitracs in 2014 ($178m)
- Multiband – Acquired and privatized by Texas HQ Goodman Networks in 2013 ($116m)
- FICO moved to San Jose, CA in 2013 ($1.5b value then, $2.6b value now)
- Imation plans to “wind down Minnesota operations” in 2016 (A $1.5b multinational with 1,500+ employees in 2008)
In contrast, list of local tech companies that have gone public since 2010 include:
While that 12:1 ratio sinks in, let’s pause and look back at 2015 to get a snapshot of the current status with what is still left here.
2015 was a terrible year overall terms of market cap valuation as a combined ~$6.5 billion dollars was lost over the last 12 months by some fifteen public tech firms.
The three biggest losers include Best Buy down 23% with a $3b+ loss, Stratasys lost $2.8b at a 70% toll to value, and Capella lost $346m or 40% of its stock value last year alone. Proto Labs, the only tech IPO since 2010, was also down $82m, or 5% of value. Qumu (formerly Rimage, a $300m tech firm in 2007) took the largest hit last year as a percentage — 80% or one hundred million dollars gone in 2015.
What real growth there was in 2015 goes to B2B omnichannel retail software maker SPS Commerce, the biggest winner, up 35% from $909,150,000 to $1,233,000,000 — no small feat. The next closest was IoT firm Digi International, which realized a 29% gain from $223,500,000 to $287,910,000.
But aside from these two, the rest were relatively flat, as you can see below sorted by market cap from high to low at EOY 2015:
Why is this happening?
How much revenue and jobs are we losing?
Will there be more tech IPO’s here in the future?
What does this mean in the grand scheme of things?
These are all good questions to consider going forward…