Madison — An Intro to the Startup Ecosystem
Arboreal and quirky, this college town packs a punch in the health tech industry. A couple of success stories and exits make us optimistic about this lake-laden city. Read on for more about the next city on our list: Madison, Wisconsin.
A State with Perks
As a state, Wisconsin’s government has a very active investment arm led by the Wisconsin Economic Development Corporation (WEDC), setting it apart from some neighboring states (Minnesota and Illinois, for example, which don’t have a program like this). Businesses seeking investment are also helped by a strong angel investment tax credit that funds and individuals alike can take advantage, incentivizing early investment.
Other non-government resources are providing Madison-based startups with the tools and network they need to thrive. Nationally-recognized startup accelerator gener8tor has its roots in Madison, and its role shaping the early startup ecosystem here is significant. Gener8tor also runs a cohort of its gBETA pre-accelerator program in the city. Madison is also home to 4490 Ventures, with one of the few $100M+ funds in the Midwest — the smallest city in the region to host a firm of this magnitude.
University Ties
The flagship campus of the University of Wisconsin runs through the city and serves as a key contributor to the startup scene. UW is consistently ranked near the top in national research spending and is a hotspot for producing Fortune 500 CEOs.
The university, in addition to training the future workforce of the city, provides resources for student and faculty startups looking to turn their ideas into a full-fledged business.
The city of Madison boasts over 200 miles of trails for biking and walking, outdoor concerts in the summer, and a booming farmer’s market, ensuring that residents will find no lack of things to do even when school isn’t in session.
An Epic-center for Talent
Medical records tech company Epic Systems has found a home in Madison, and they’ve been a magnet to the 10,000 employees who work on their suburban campus. The draw of a major tech employer gives Madison a strong talent pipeline in addition to the UW grads heading out into the workforce. In fact, alumni of the Epic family are already spinning out startups in the healthcare tech space: digital health startup Redox has raised $50M to date, and Ensodata just announced a $9M Series A this June.
The health tech/medtech space is expansive, and it will be exciting to see more Madison-based startups emerging in this industry cluster. Other startups outside of the health industry, like food delivery app EatStreet and insurtech startup Understory, are ensuring that the city’s startup ecosystem doesn’t have just one singular focus.
May We Have Your Attention, Please?
It’s a truth universally acknowledged that VC funds are still largely coastal, but as more firms begin to look to the Midwest to see their dollar stretched farther in places with a lower cost of living, Madison is gaining attention. While VC funding still hasn’t been fully realized here, the city is gaining a reputation for being a hot spot for investment from reputable firms and has seen a couple of exciting exits. Here’s a shortlist of some of the deals and acquisitions Madison has seen in recent years:
Redox — Battery Ventures, RRE, Flybridge
Understory — True Ventures
Propeller Health — acquired by Resmed for $225M
These, in addition to regionally-backed all-star startups like Ensodata, Eatstreet, and Abodo — make one thing clear: startup activity here is on the rise.*
*Indeed, Madison climbed 3 spots in our Midwest Cities Rankings in 2019. What will 2020 hold? Stay tuned to find out!
For more information on Madison-based startup resources, check out their ecosystem page on Midwest Startups.
