21 Out Of State Tech Startups Came To Minnesota This Summer…Will Any Stay?

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21 out of state tech startups landed in Minnesota this summer by way of three different startup accelerators: Gener8tor, Techstars Farm to Fork, and Techstars + Target Retail.

Farm to Fork is new, but we can look back on the facts surrounding the other two programs and get a sense of any gravitational pull these programs may have, while wondering if any / how many of the these 21 will actually stick around after the fact?

Gener8tor


 
After drawing Minnesota tech companies out of Minnesota on more than one occasion, Milwaukee forged gener8tor broke ground in Minnesota Fall of 2016 and has quickly integrated into Minnesota’s tech scene, drawing attention from regional investors and national startups alike.

Gener8tor operates two distinct founder friendly programs: their no cash/no equity gBETA happens twice a year for the very early stage local tech companies, while their signature accelerator offers startups the typical $20k cash for 6% equity with a full-blown demo day following ~90 days of incubation

The latter tends to draw applicants from all across the world and is highly competitive compared to gBETA; Midwest investors follow these startups much closer and tend to show up in person for their grand finale (the next one is Sept 6 in Minneapolis).

Five tech startups appeared in their inaugural accelerator class of 2017.  Three were already Minnesota made, Routique is Canadian-born, and KiraKira3D arrived by way of California. Neither of those two out-of-state newbies who came here last summer now claim Minnesota in part or whole.

Routeique, which just raised a bridge round and made an acquisition did say that “Minnesota will likely figure prominently in our plans to push more heavily into the US,” though that remains a wait and see sort of situation.  Meanwhile, Suz Somersall, the CEO of KiraKira3D, did not comment one way or the other on any future relationship with Minnesota tech.

gener8tor’s Minnesota Managing Director Eric Martell maintains hope that one or both will someday plant a flag of sorts here, but has already shifted the focus to cohort number two, which kicked off in June.

Looking at that latest class, there are five fresh startups, four of which came from out of state (Omaha, Detroit, San Francisco, Miami). None of those four who came in from the outside have made any public statements about their intentions to stay or leave following this years incubation period.

Techstars Retail Accelerator In Partnership With Target


 
Now into year three of a three year relationship between Techstars and Target, the acclaimed Retail Accelerator invited eight of ten startups in this years cohort from out of state.

Between their first two classes, Inspectorio and Branch Messenger stand out as prior companies that straight up moved to Minnesota and now both continue to make their mark and grow locally as bona fide Minnesota companies.

“Moving to Minneapolis in 2016 was a milestone for Branch and it’s proven to have been an excellent decision for a number of reasons. In particular, from a business development perspective, it’s extremely useful to have access to such a breadth of potential customers, including Fortune 500 companies. The pool of talent from which we can draw from as a B2B enterprise software company is also deep and has contributed meaningfully to Branch’s rapid growth,” says Branch’s founder and CEO Atif Siddiqi on the move.

After raising a $10m Series A last year for their employee scheduling software, Branch now employs approximately 30 full time employees at their local headquarters 301 4th Ave S, Minneapolis.

“Minneapolis is definitely the best place for retail startups in The United States.  We have been able to find the mentors, advisors, talent, and investors that have helped Inspectorio to become the leading quality and compliance network platform in the industry. Besides the business perspective, it is one of the best, if not the best, place to raise kids and have Family in America!” exclaimed Inspectorio cofounder and CMO Fernando Moncayo Castillo when asked about their decision to come to Minnesota.

The supply chain SaaS also recently raised a $10m series A with participation from two notable Fortune 500s – Ecolab and Target, while about 30 of their overall employees call Minnesota home at 60 South 6th St., Suite 2800.

“While it’s not our top metric of success for us…it is an interesting byproduct if companies do stay here,” says the Managing Director Ryan Broshar. ” It’s certainly something that we encourage, but it’s all about what makes the most sense for the startups.”

The retail relationships and Minnesota way of life have proved sufficient enough motivation for these two, though others, such as StoryXpress and SpotCrowd (which had intentions of becoming Minnesota-based) have yet to manifest that reality. Neither company opted to elaborate on why not Minnesota?

Techstars Farm To Fork Accelerator In Partnership With Ecolab and Cargill


 
The Techstars Farm to Fork Accelerator brought nine fresh companies herel in July, and like the others, offers  3 month paid immersion that will culminate in a demo day during Twin Cities Startup Week, October 8-14.

100% of the first year cohort arrived in St. Paul from out of state, and while Managing Director Brett Brohl has prognostications about their future in Minnesota, in saying “I will have a better idea as we move along in the program but I do think we will have companies open offices in the Twin Cities,” he’s right in that we’ll all have to wait and see just how this one shakes out.

Those who do decide to claim Minnesota will be in good company anchored by the largest privately held corporation in the United States — Cargill — which is undergoing a tech evolution that includes both blockchain and AI initiatives. If their prior acquisition and/or investing habits offer any indication, then Cargill will naturally seek to deepen relationships with companies can accelerate their digital transformation.

Other leaders in the local AgTech space who could prove influential on any Farm to Fork Accelerator company in relation to Minnesota include Conservis (~$32m debt & equity),  Sentera ($8.5m VC), and Metafarms ($6m raised to date).

In the end, it’s that rare mix of tangible business opportunity, cultural lifestyle traits, and formidable personal relationships that add up to win the hearts and minds of entrepreneurs who have the power of choice in today’s world. What can those within Minnesota’s tech community do to help tip the scales in favor of our hometown over the coming weeks?

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