At the start of the year, 2018 fundraising numbers are growing, giving us a snapshot of how the top Midwest startups have behaved. It was a good year for the Midwest, which we define here as Minnesota, Wisconsin, Illinois, Indiana, Michigan and Ohio. Below is a list of the major VC investments of each Midwestern state in 2018, in descending order.
At Issue 6, the largest venture capital investment in Wisconsin involved Propeller Health, with a $ 20 million spin-off, led by AptarGroup, with the participation of Safeguard Scientifics, Capital Social, Hikma Ventures, 3M Ventures and SR One. The company planned to use the money to expand medical treatments beyond asthma and chronic obstructive pulmonary disease (COPD). Last month, however, Propeller was taken over by ResMed, a company that supports millions of people with respiratory diseases. The addition of Propeller Health will help position ResMed as a leader in the management of patients with COPD.
In Indiana, Scale Computing is ahead of Propeller Health. According to a document filed by the SEC, a $ 21 million strategic round was closed in October. Scale Computing uses machine virtualization and data analysis to help IT administrators evolve their operations. This last cycle was led by Lenovo. Businesses work strategically together in direct competition with VMware.
Last year, the largest venture capital venture in Michigan was an investment in StockX, a stock market for genuinely guaranteed products, such as sneakers, watches and rare designer apparel. StockX closed a $ 44 million financing round, co-led by Google Ventures and Battery Ventures. Detroit Venture Partners and personalities such as Salesforce founder Marc Benioff, rapper Eminem and actor Mark Wahlberg also participated in the deal.
Columbus, Ohio's root insurer, is breaking the nine-digit mark. Root closed a $ 100 million Series D round last August led by Tiger Global, with the participation of Redpoint Ventures, Scale Venture Partners and other partners. Root uses machine learning to develop customized insurance quotes based on people's driving behavior and has attracted a lot of interest from investors. In addition to the $ 100 million round in August, the company closed a $ 51 million round in March.
Tempus Labs, of Chicago, in second place, raised a $ 110 million series last August. Tempus uses machine learning and health care data to provide actionable medical information that allows for better results for each patient. Baillie Gifford led the round, with the participation of existing investors NEA, T. Rowe Price and Revolution Ventures. The company plans to use this investment to expand into non-US markets and provide information on other diseases. Tempus had already pledged $ 80 million in March, raising total funding for 2018 to $ 190 million.
Finally, at $ 200 million, the largest private equity transaction that the Midwest saw in 2018 was Bright Health of Minnesota. Bright Health is transforming the US health insurance and health care sectors by making them more affordable and more accessible to individuals. Partners' Statement and Meritech Capital were the new investors in this round, which included renewed support from Bessemer Venture Partners, Greycroft, NEA and Redpoint Ventures. The company will use this money to expand its offering to more markets and accelerate the growth of its business.
The major investments we have seen in these startups in 2018 further strengthen Midwest expertise in areas such as healthcare, insurance and markets. It will be interesting to see what these companies – and others emerging and gaining ground in the Midwest – will do in 2019.
Pete Wilkins leads Hyde Park Angels (HPA), the Midwest's most active venture capital group.