From Healthtech to Beer Tech, Xconomy Wisconsin’s 1st Year in Review

Xconomy Wisconsin — 

With 2014 coming to a close, it’s an appropriate time to reflect on the past year. That’s especially true for me today, as Xconomy celebrates the one-year anniversary of our launch in Wisconsin.

It’s been an eventful 12 months, with plenty of big news—both exciting and discouraging developments for advocates of Wisconsin’s innovation and startup scene.

We’ve seen new startups pop up with fun (but early) products, from virtual personal assistants that will try to read your emotions to a compact jet ski aimed at millennials.

We’ve seen that although Madison and Milwaukee are unquestionably the state’s leading entrepreneurial hubs, interesting stories of innovation can be found in all corners of Wisconsin.

We’ve seen the continued development of organizations and programs that aim to form a nurturing infrastructure for Wisconsin startups.

But the Badger state still faces many of the same challenges that it did a year ago. It still ranks near the bottom of the country for entrepreneurial activity. It still lags states on the coasts and elsewhere when it comes to dollars invested in startups. As we saw this year, local startups still find reasons to leave Wisconsin—either quietly, or with a bit of public controversy.

But there also seems to be an increasing number of reasons for startups to stay here. Local cheerleaders point to, among other things, a growing number of in-state funding options; hard-working, loyal, and talented recent college graduates; and a lower cost of living, especially compared with the likes of San Francisco.

Whether or not Wisconsin has a stronger startup community now than it did a year ago is difficult to measure, but at the very least, the conversation around entrepreneurship seems to have grown louder here.

Before I delve into the year’s top stories, I’ll leave you with the top questions that I’ll be exploring in 2015 (and beyond):

Are all of those entrepreneurship programs actually helping to move the needle?

Can Milwaukee’s nascent software startup cluster catch up to Madison’s?

How will the entrepreneurial communities in Madison and Milwaukee bridge a gap that at times seems bigger than an 80-mile drive on Interstate 94?

With funding for life sciences research and early-stage companies getting tighter, are the best days of Madison’s biotech cluster in the rear view mirror?

As valuations for Silicon Valley startups shoot through the roof, can Wisconsin produce a monumental buyout—I’m talking at least half a billion dollars—in the software sector?

But those questions are for another day. Right now, let’s take a look at some of the most important and fun stories that Xconomy Wisconsin brought you in our first year:

Themes/trend pieces

—What made companies like SurveyMonkey say adios to Wisconsin? What if that company, and other Wisconsin-born startups that left, had stayed? I explored those questions and tried to find out if more startups are choosing to remain here.

—Madison leaders have been making a case for the state’s capital to be a national hub for software companies, especially in healthtech. Here’s why that vision could come true—and how it might fail.

—While two-year-old Wisconsin-based startup accelerator Gener8tor picked up momentum with its first exits and an infusion of new funding, 2014 was arguably the year of the nonprofit startup accelerator in Wisconsin. I chronicled the launch of several of these programs—which typically dole out grants in lieu of the traditional angel investment—including the Launch Box Growth Accelerator in Racine; The Commons and Bridge to Cures in Milwaukee; and Madworks and Discovery to Product in Madison.

—Milwaukee and Madison get most of the attention when it comes to Wisconsin entrepreneurship, and for good reasons—there are more startups in those cities, and they get most of the venture backing. But that doesn’t mean there aren’t interesting stories coming from the likes of Eau Claire, Green Bay, and Marshfield.

—One of the more closely watched stories in Milwaukee these days is a local effort to build a world-renowned water technology cluster, in part, by growing a crop of innovative startups. It’s early, but here’s how The Water Council’s startup accelerator is doing.

Big headlines

—Monona, WI-based Shine Medical Technologies inked a deal with New York investor Deerfield Management that could be worth a whopping $125 million. That’s by far the largest venture capital deal in Wisconsin this year, although there’s an asterisk because Shine’s round is a combination of equity and debt financing, and the debt will come in phases based upon Shine hitting certain undisclosed milestones.

—The next-biggest funding round announced in Wisconsin this year (unless something hits in the next two weeks) was Madison-based Propeller Health’s $14.5 million Series B round.

—Madison-based Exact Sciences (NASDAQ: EXAS) had a big year, coming back from near-death to publish results of a successful clinical trial of its DNA-based stool test for colorectal cancer, which led to FDA approval and Medicare reimbursement of the diagnostic. Now, the company must win over private insurers and prove that doctors will want to prescribe the test in droves—and that patients will take it.

—Cellular Dynamics (NASDAQ: ICEL), another one of Madison’s high-profile biotech stories, took a small but notable step into regenerative medicine.

—In a rare move for a Wisconsin software company, Brookfield-based Connecture (NASDAQ: CNXR) went public—just not at the price it was hoping to get.

Fun stories

—Mequon, WI-based Geppetto Avatars has created virtual characters that it envisions becoming, to a certain extent, our complementary caregivers, teachers—maybe even friends. These are the kinds of stories—science fiction blurring with reality—that are a thrill for a journalist to tell.

—The founders of Whitewater, WI-based BomBoard think they’ve developed the next big thing in the watersports world: a smaller, cheaper jet ski. This story also features my favorite Xconomy headline of the year. (Kudos to my editor, Rebecca Zacks.)

—Milwaukee-based OnKol wants to help grandma and grandpa join the “Internet of things” movement with a slick but easy-to-use device.

Apple co-founder Steve Wozniak stopped by a Milwaukee tech conference, and I asked him about wearable devices. He didn’t disappoint, explaining why he likes Google Glass while also completely trashing Samsung’s Galaxy Gear.

—This list wouldn’t be complete without a nod to Wisconsin’s brewing heritage, so please enjoy these stories on the intersection of beer with new technology and a bar-hopping mobile app. Cheers, Xconomy readers, and here’s to 2014.