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Investing in Iowa Reports

Investing in Iowa: Q4 2019

January 9, 2020

35 different companies across Iowa raised more than $44 million in venture capital in 2019, according to our findings.

In Q4, Iowa-based companies raised $7,770,000. That combined with the investments from Q1-Q3 brings the total amount raised in 2019 to $44,046,000. Here is a list of Iowa companies that raised investment money in Q4 of 2019.

CompaniesLocationAmount RaisedDate
EdammoIowa City$165,00011-06-19
Farmland FinderDes Moines$3,000,00012-3-19
FBB BiomedIowa City$100,00012-23-19
InseerIowa City$100,00011-25-19
MakuSafeWest Des Moines$1,500,00012-15-19
MalumCoralville$2,000,00010-30-19
MedTek Valencia eCoinCedar Falls$905,00012-10-19
$7,770,000

KEY TAKEAWAYS

Investments were down from 2018

Compared to the total amount raised in 2018, investments were significantly down last year. 2018 saw a total of $105 million raised, more than double what was raised in 2019. The average investment round in 2018 was $3.3 million, while the average investment round this year was $1.2 million.

That said, 2018 saw a $33 million round raised by IDx, an AI-based diagnostic system for the autonomous detection of diabetic retinopathy. This $33 million round in many ways served as an outlier, making up more than 30% of the amount raised in 2018 and more than tripling any other round raised.

Investments continue to come from within the state

Similar to 2018, much of the capital raised in 2019 came from investors within the state.

Next Level Ventures invested in several of the companies that raised capital in 2019 including Makusafe and FarmlandFinder. Next Level is currently in its second fund with plans to have invested in 20 Iowa-based companies with combined sales of at least $120 million.

Ag Startup Engine is another fund that invests in Iowa-based companies. Located in Ames, Ag Startup Engine invests smaller amounts-typically between $25,000 and $50,000 in early-stage agtech companies. To date, Ag Startup Engine has invested in ten different ag startups located in Iowa.

Million dollar rounds are becoming commonplace in Iowa

15 of the 35 companies that raised capital in 2019 had rounds of over $1 million. That combined with 2018 makes 32 companies that have raised rounds of at least $1 million over the last two years.

Agtech and medical companies continue to dominate

Unsurprisingly, agtech companies made up a large chunk of the companies that raised capital in 2019. The majority of agtech companies that raised capital are located in central Iowa. Several agtech companies raised rounds of over $1 million capital including AgCertain Industries, SwineTech and Tractor Zoom.

In Iowa City and Coralville, many of the companies that raised investments were in the healthcare industry. Q3 saw a $2.25 million round by Iota Motion in Iowa city and a $2.23 million round by Vida Diagnostics in Coralville.

New $30 million venture fund

Q3 saw the launch of a new $30 million venture fund by Cedar Rapids-based nonprofit NewBoCo.

NewBoCo announced in October the ISA Ventures Fund (ISAV), a $30 million multi-stage fund focused on bringing capital to early-stage startups, fast-growing companies, and expansion-stage companies to Eastern Iowa.

The Fund will provide a wide range of resources in addition to capital, including technology, sales and marketing support to selected startups. The fund will invest in about 125 companies from 2020-2024, across a variety of industry sectors. Companies will range from early stage startups to mature, expanding companies.

This list was made from a combination of SEC filings, Crunchbase and previous Clay & Milk stories from throughout the year. If you are aware of investments we may have missed, please post them in the comments or send us an email and we will be sure to add them.

Clay & Milk composes a similar list of investments for every quarter to build a credible track record of capital raised throughout Iowa. Over time, we add analysis to these posts, comparing past time periods and noting trends as they appear.

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Investing in Iowa: Q4 2019 | 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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