Colorado continues to go big!
Infographic by Adam Calica, head of product at Built In
*Sources: SEC filings, press releases and confirmed news reports (amongst other public information).
**Digital tech companies counted only. Computer hardware and electronics excluded.
***Individual company information can be found in the Built In Colorado database.
Colorado tech companies raise $758M and exit for more than $11B. Colorado tech companies increased their funding and exit totals in 2014, making it the best year on record for the state’s digital tech economy. 140 Colorado digital tech companies received a total $758 million in funding. This is 64 percent higher than 2013.36 Colorado digital tech companies were acquired or had initial public stock valuations in 2014, for a sum of more than $10.97 billion. This is 836 percent higher than 2013. Investment in startups was geographically split 42.3 percent and 56 percent between Boulder and Denver, reflecting Colorado tech’s twin orbit around these cities.
Raising money isn’t as difficult as it once was
Higher funding totals means Colorado startups are having an easier time raising capital. In 2014, TrackVia, a Denver-based startup with a customizable SaaS program for tracking sales, inventory and other business processes, raised $2.5 million in funding. CEO Pete Khanna confirmed raising capital in Colorado has become easier in recent years.“Gone are the days of ‘well we can’t really attract out of state capital,’” said Khanna. “There is a lot of out of state money coming into Colorado.” TrackVia, for example, has investors from across the country. “All venture capitalist will travel for good deals,” said Khanna. “Colorado is now a destination for people to invest in from all over the country.”
2014 was also a good year for buyouts and IPO valuations. Several companies were acquired for more than a billion dollars. So called unicorn exits (companies valued at over $1 billion) are a mark of success according to JB Holston, executive director of the Blackstone Entrepreneurs Network Colorado. Several unicorns in 2014 included ViaWest’s $1.2 billion sale, Mercury Payment Systems’ $1.65 billion sale and Trizetto’s $2.1 billion sale. “We are getting a lot of these high value exits, that I argue rival any ecosystem,” said Holston.
Consumer tech companies breaking out too
Despite Colorado startup's typical enterprise nature, a significant number of consumer-focused startups also received investments in 2014. Craftsy, a DIY craft making website, raised $50 million, Ibotta, a cash-back reward app, raised $22 million, and Orbotix, a company that produces smartphone-controlled robot toys, raised $15.5 million. In particular, Craftsy has been on a roll, raising a total of over $100 million over the last four years. And though initially the consumer Internet company found hiring sometimes difficult in a state that has more business-to-business professionals, Craftsy is finding it is easier lately. “You can feel it over the last two years changing,” said CEO and co-founder John Levisay. “I think from an engineering and production side of our business there’s a lot of directly applicable talent.”
Colorado is becoming a major tech hub
The growth of Colorado tech has created higher demand for tech skills. Companies like Galvanize, a business that trains people in web development and data science, have found the state to be a good place to pioneer their tech education intensive programs. In 2014, Galvanizeraised $18 million in investment to further expand its training programs. By 2016 the company plans to have expanded to five Colorado campuses: two in Denver, two in Boulder and one in Ft. Collins. “Colorado was a great market to prove the model for building a platform for skills and access,” said Jim Deters, CEO and co-founder. “Denver is a growing and diversifying tech community and our investors are supportive of our massive investments in Denver, Boulder and Ft. Collins.” While Galvanize is focused on training novices, more experienced tech workers in Colorado are attracting the attention of large out-of-state tech companies. Google, for instance, announced in December 2014 that it has plans to build a larger campus in Boulder and increase its workforce from 340 people to around 1500. The company wants to expand the success it has had using Colorado talent.
To the Boulder Planning Board, Google’s Boulder site director, Scott Green said:
"When a teenager in Japan buys a Google Play app, they can charge the purchase, and the software systems that make that possible are developed in Boulder. When your daughter or your son in BVSD(Boulder Valley School District) uses Google apps, that software is developed in Boulder. When you pull up Google Earth, the buildings and footprints are things that have been created in Boulder. When Google reminds you it's your mother's birthday, that software was written by a team here in Boulder.” Colorado is becoming much less of an outpost for tech companies and more of a major tech hub.
“We have this confluence of lifestyle, cost of living, access to engineers, local investors, who have national reputations like Foundry Group and Access Venture Partners, as well as a Mayor [of Denver] who gets it and a Governor who is an entrepreneur himself,” said Levisay of Craftsy. “All the ingredients are there.”