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Throughout the 20th century, the American Midwest was known as the manufacturing center for the nation, and for much of the world. Even today, a majority of agricultural commodities are developed and produced there. However, does the Midwest also have the capability to be a burgeoning place for technological startups? In Jason Rowley’s article “Here Are The Top Midwestern States and Cities For Startups,” from techcrunch.com, he argues that the answer is yes. And to come up with that answer, he dives deep into the numbers.
While Crunchbase News, according to Rowley, had previously found that the number of seed and early-stage deals had had a downturn in the U.S. as a whole, resulting in a top-heavy market, that doesn’t necessarily tell the whole story for the Midwest. While deal counts may have been on a downward trend, the deal volume has not. For example, between 2012-17, the percentage share of all Midwestern dealflow going to West North Central states (the Dakotas, NE, KS, MN, IA, MO) has grown nearly one-fifth, from 25.4 percent to 31.2 percent. And as far as the amount of money Midwestern startups have raised over the last few years, the trend is generally moving up and to the east. For example, depending on the year, East North Central states (WI, IL, IN, OH, MI) took anywhere from 70 to 78 percent of total dollar volume.
After looking at these numbers, though, it would be disingenuous to suggest that any city but Chicago was driving the entire region. When looking at the top Midwestern cities as measured by number of startup funding rounds, Chicago outdoes its closest competitor (Minneapolis) by over 60 percent. And looking at the top Midwestern cities as ranked by venture dollar volume over the same period of time, of course Chicago’s amount is again over three times greater than number two. But Rowley’s report shows our very own St. Louis taking 4th in the top 10 midwestern metro areas both by deal and dollar volume.
St. Louis is on the rise. The numbers don’t lie.