If You Build It, They Will Come…To Chicago

By March 1, 2011

Written by Elan Mosbacher

Even in the midst of winter, the Windy City startup scene is beginning to blossom. Entrepreneurs in Chicago are building businesses, and investors are coming from across the country to fund them.

While there has been some debate in recent years about the viability of Chicago as a startup city, I believe in the Field of Dreams motto: if entrepreneurs in the Midwest build great companies, investors will come to fund them.

Don’t just take my word for it.

If you’ve been hibernating this winter, here’s what you may have missed:


SproutSocial, formerly based in one of Groupon’s conference rooms, secured $1 million in funding from Lightbank on November 9 and just announced another $10 million from NEA on February 22. Their software provides businesses with social media dashboards, analytics, and management tools. While SproutSocial’s founder Justyn Howard considered starting the company in Silicon Valley, he actually found that building a team in Chicago is more efficient and manageable than other tech hubs.


GiveForward, a company that helps people raise money for medical expenses, announced $500,000 of funding on February 14 from several angel investors and New World Ventures. GiveForward was founded in 2008 and was part of the inaugural class of Excelerate Labs. According to founder Desiree Vargas, “the funding climate is changing in Chicago.”


Tap.me, a next generation in-game advertising startup, announced a Series A round of just over $1 million on January 18. Investors included the Hyde Park Angels, the I2A Fund, and David Cohen, CEO and Founder of TechStars. According to Tap.Me CEO Joshua Hernandez, the company plans on “continuing their customer product development and analytics platform, launching developer tools, focusing on advertising and product integration, and strengthening relationships with sponsors for games” with their new funding.


FeeFighters, a comparison shopping website for small business credit card processing, announced on January 13, that they raised $1.6 million in funding to expand their products and marketing. Not only did they raise money from Chicago-based OCA Ventures, the I2A Fund, and Hyde Park Angels, but FeeFighters also attracted out-of-town money from 500Startups and Arizona Bay Technology Partners. It looks the FeeFighters team is having a fun time working on their business.


Groupon, the daily deal websites, raised “Like $1 Billion” on January 10 after turning down a rumored $6 billion acquisition offer from Google. Soon after the funding, the company announced a series of acquisitions in Israel, South Africa, and India, and plans to use proceeds of the round to fuel global expansion, invest in technology, and provide liquidity for employees and early investors.


Ifbyphone, the voice application company that helps businesses measure, manage and automate customer interactions, announced closing a $10 million Series B round on December 28th. Ifbyphone’s investors include Chicago-based Apex Ventures, Origin Ventures, I2A Fund, and Second Century Ventures, as well as Midwest based Spring Mill Ventures and River Cities Ventures. “These new funds enhance our continued efforts as the leading company automating the often forgotten voice component of customer interactions,” said Ifbyphone’s Founder and CEO Irv Shapiro.


WatermelonExpress, a test prep app development company, announced an undisclosed Series A round from Lightbank on December 7. Over 75,000 students have used their apps to prepare for tests like the MCAT, GMAT, and GRE.


EduLender helps students compare student loan options the way FeeFighters helps small businesses compare credit card processing fees. Hyde Park Angels funded EduLender on December 6 (about 5 weeks before announcing their funding for FeeFighters). While Groupon established Chicago as the Daily Deal Mecca, companies like Orbitz, FeeFighters, and EduLender are giving Chicago a strong reputation for comparison shopping websites too.


GrubHub, the online food and restaurant delivery ordering service, announced on November 8 that they raised $11 million in a Series C round led by Benchmark in order to invest in mobile offerings, marketing, and sales. If you’ve been on the CTA lately, you’ve certainly seen their ads.


JabberJury is certainly the most out-there idea on the list. They plan to bring together people with conflicts who seek “JabberJurors” to help decide who is righteous and deserving of the JabberJury win. You can read the full story behind this company on FlyoverGeeks, but the bottom line is that even a company with an untested business model and no real website managed to raise $1.2 million from Lightwater LLC in Florida.

This winter’s funding news has demonstrated that the startup scene is alive and well in Chicago. Hopefully we’ll see several of these companies “go the distance” in the near future.

If you are a Chicago entrepreneur looking to get started, apply for the Excelerate Labs summer 2011 program where EduLender, FeeFighters, GiveForward, and Tap.Me all got their start. If you’re looking to join a startup, well, they have to do something with all of that funding…

Elan Mosbacher is the Marketing Manager at Chicago-based B2B startup Ifbyphone, which helps businesses measure, manage, and automate customer interactions using Call Tracking, IVR, and Voice Broadcasting technologies. You can find Elan on Twitter @mosbacher.