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Investing in Iowa Reports

Investing in Iowa: Q4 2020

December 29, 2020

Iowa startups raised $145 million this year. That is by far the most capital raised by Iowa startups seen since we began tracking investments in 2018. Since the beginning of 2018, Iowa startups have now raised a total of more than $300 million.

The following is a list of all known investments raised by Iowa companies in Q4 of 2020.

CompaniesLocationAmount RaisedDate
Ag ContinuumWashington$50,00011-12-20
IgorWest Des Moines$400,00010-29-20
Moov FinancialCedar Falls$27,000,00012-4-20
RantizoIowa City$7,500,00012-2-20
Tractor ZoomWest Des Moines$3,000,00012-20-20
Viewpoint Molecular TargetingCoralville$8,000,00012-16-20
$45,950,000

KEY TAKEAWAYS

Investments are way up from 2019

Since the start of 2018, Iowa startups have raised just over $310 million.

Compared to the total amount raised in 2019, investments were significantly up this year. 2019 saw a total of $44 million raised, less than one-third of what was raised in 2020. The average investment round in 2019 was $1.2 million, while the average investment round this year was just over $5 million.

That said, 2020 saw a $40 million Series B round by Growers Edge along with a $27 million Series A round raised by Moov Financial. Together, these two rounds made up nearly made up $67 million, nearly half of the total capital raised by Iowa startups this year.

Multimillion-dollar rounds have become commonplace in Iowa

Rounds with deal size of $1 million or larger grew from 15 in 2019 to 20 in 2020.

20 of the 29 of the investment rounds (69%) raised in 2020 were for more than $1 million. That number is significantly up from 2019 (42%) and 2018 (54%).

5 rounds of over $10 million were raised this year.

Investments continue to come from within the state

Similar to 2019, much of the capital raised in 2020 came from investors within the state.

Next Level Ventures invested in several of the companies that raised capital in 2020 including a $4 million seed round in MSUITE and a $2.5 million round in Pitchly. 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.

ISA Ventures reached its first close of $15 million this year and began investing in Iowa-based companies. The fund ultimately aims to raise between $20 and $30 million to invest in about 100 companies over the next five years. Led by entrepreneur and investor Eric Engelmann, the fund is the largest venture fund of its type in Eastern Iowa. ISA began investing in Q4 2020, participating in a $7.5 million round raised by Rantizo and a $3 million round by Tractor Zoom.

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 fifteen different ag startups located in Iowa.

Biggest players

Moov Financial, an open source embedded banking platform based in Cedar Falls, had a big year. The company raised $5.5 million in seed funding in August followed by its $27M round from A16Z in November. Founded by Wade Arnold and Robert Smith in 2017, Moov’s open source platform allows companies to quickly deploy basic financial service solutions to seamlessly receive funds, store value, and remit payments.

Growers Edge closed a $40 million Series B round of financing to accelerate the development of its financial technology products, solutions, and tools for the ag industry. Based in Johnston, Iowa, the company has pulled together a range of fintech and analytics tools. The system combines data from local growers, agtech vendors, and insurance partners including financial data; agtech field data; grower history; and lending data.

Digital Diagnostics (formerly IDx), a Coralville-based AI diagnostic healthcare technology company, filed paperwork in June indicating it has raised $12.5 million in funding. In 2019, the company raised $33 million in a Series A financing round. In August, the company acquired 3Derm Systems, a move to expand its AI technology to detect more illnesses.

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.

If you are interested in sponsoring the Investing in Iowa series, please contact Managing Editor Jake Slobe at jake@clayandmilk.com for additional information.

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Investing in Iowa: Q4 2020 | 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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