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2018 Silicon Prairie Report: 4 Iowa cities make the top 15

February 4, 2019

Silicon Prairie News released their “2018 State of the Silicon Prairie Report” last week. This year the annual report looked at and ranked 42 cities in 11 states across the Midwest including Iowa and all of its neighbors.

The methodology for the report was created and executed by Chapman & Co, an Omaha-based consulting firm, and looked at eight different components for each city: small business activity, cool jobs, sustaining companies, structure, innovation, venture investment, community spirit and connectivity.

The 42 cities were split into 5 tiered categories based on their population size.

Four cities in Iowa—Ames, Des Moines, Iowa City and Cedar Rapids—ranked among the report’s top fifteen.

Ames (#6)

Ames ranked sixth on the report, making it the highest ranking city in Iowa. Ames was the highest ranking city among tier 5 cities (populations less than 200,000). The report credited much of Ames’ success to the large amount of talent that comes out of Iowa State University.

According to our own findings, Ames-based companies raised 12.5 million in funding in 2018, with the vast majority of them being agtech companies.

Recommmendations: The report recommended that Ames focus on building strong customer and capital connections with larger cities and building more traditional businesses that receive SBA loans.

Iowa City (#9)

Iowa City was listed at ninth and was the second-ranked tier 5 city behind only Ames. The report cited Iowa City’s high number of technology graduates as a big reason for its high ranking. The report also called attention to Iowa City’s large amount of success with healthcare related companies, specifically mentioning IDx and Corvida.

IDx, an AI-based diagnostic system for the autonomous detection of diabetic retinopathy, raised a $33 million Series A round in September. This was the largest investment round in all of Iowa of 2018.

Recommendations: The report recommended building programming for non-science graduates looking to start non-technical businesses that fill out the ecosystem. The report also suggested looking for opportunities to work with other cities within the state such as Des Moines and Cedar Rapids.

Des Moines (#13)

Des Moines ranked 13th on the list and was one of the few mid-size communities that over-produced venture capital, according to the report. Des Moines was the third highest ranking tier 3 city, coming in after Lincoln and Madison. Madison was the highest ranking tier 3 city and ranked fifth overall.

The report pointed to Dwolla as a company that continues to be a mainstay within the Des Moines startup ecosystem. LenderClose, Denim and Pitchly were also listed as top startups in the community.

According to Clay & Milk findings, Des Moines companies raised just over $28.5 million in funding in 2018.

Recommendations: The report recommended a focus on small business-related SBA loans for manufacturing and tech transfer and examining ways to integrate new technologies from Ames, Iowa City and other parts of the region into their economy.

Cedar Rapids (#15)

Cedar Rapids was listed at fifteenth, making it the highest ranked tier 4 city (populations between 200,000 and 300,000) without a large public research university, according to the report. Cedar Rapids was praised for doing particularly well in SBA loans for a city of its size.

The report called out Rockwell Collins (now known as Collins Aerospace) as an anchor point, providing technical jobs and driving a strong workforce for the city. NewBoCo was also commended for being a strong asset for the community.

Recommendations: The report recommended that Cedar Rapids continue to build the corridor brand and tools that cross between Cedar Rapids and Iowa City.

Three other Iowa-based cities were also listed in the report: Davenport (#34), Waterloo (#35) and Sioux City (#39).

Click here to download the full report.

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2018 Silicon Prairie Report: 4 Iowa cities make the top 15 | Clay & Milk
A central Iowa ag-tech accelerator has secured more backers and finally has a name. The Greater Des Moines Partnership first announced the accelerator last year, naming four initial investors. On Monday, the Partnership said the program will be called the "Iowa AgriTech Accelerator" and named three new investors. The new investors include Grinnell Mutual, Kent Corp. and Sukup Manufacturing, all Iowa companies. They join investors Deere & Co., Peoples Co., Farmers Mutual Hail Insurance Co. and DuPont Pioneer. Each investor has agreed to put up $100,000 for the first year of the accelerator. Startups entering the program will receive $40,000 in seed funding in exchange for 6 percent equity. Tej Dhawan, an angel investor and local startup mentor, is serving as interim director until the AgriTech Accelerator names a permanent leader. Dhawan held a similar role with the GIA before Brian Hemesath was named as managing director. As interim director, Dhawan said his main job includes hiring the accelerator's executive director, establishing a business structure and initial recruiting for the first cohort. The accelerator will place few filters, such as location and product, on the applicant pool, Dhawan said. "When you’re seeking innovation, innovation can come from every corner of the world so why restrict ourselves," he said. One area the the AgriTech Accelerator won't recruit from is biotech. For its first cohort, the AgriTech Accelerator will work out of the GIA's space in Des Moines' East Village, Dhawan said. A future, permanent home is still to be decided. The accelerator's program will host startups from mid-July through mid-October, ending with an event connected to the annual World Food Prize. The GIA, which the AgriTech Accelerator is based on, also ends with presentations at an industry event. The accelerator has also started lining up a mentor pool. The Iowa Corn Growers Association, Iowa Soybean Association and the Iowa Pork Producers Association have agreed to provide mentors, as has Iowa State University. While the AgriTech Accelerator is loosely based off of the GIA, it will differ in its business structure, Dhawan said. The GIA runs through a for-profit model for both operations and its investment fund. The AgriTech Accelerator will have a nonprofit model for its operations and a for-profit setup for its fund. Dhawan said the nonprofit model is being used so the accelerator can better work with other nonprofit partners, such as trade associations. "These are all organizations that are nonprofits and can be amazing stakeholders without ever having to be investors in the accelerator," he said. "It becomes easier to work with trade associations in their nonprofit role when we are also a nonprofit." When it's up and running, the AgriTech Accelerator would be one of a handful of ag-focused startup development programs in Iowa. Others include the Ag Startup Engine out of Iowa State University and the Rural Ventures Alliance from Iowa MicroLoan. Matthew Patane is the managing editor and co-founder of Clay & Milk. Send him an email at mpatane@clayandmilk.com.
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