[ibimage==39472==Large==none==self==ibimage_align-center]
As far as exits go, things are picking up for Chicago tech companies: over 25 companies exited in the first half of this year (up from six companies exiting in the first half of 2013). Thanks to Paylocity’s $119 million IPO, this year started off right for Chicago tech, and GrubHub followed suit this April with a $192 million IPO. Fieldglass also produced some big waves when it was acquired for over $1 billion in March. In Q3 so far, three companies have already exited (ProcureApp, SocialKaty, Trunk Club).
All of the companies that have exited this year in Chicago have one thing in common: hyper-growth. We see it in their hiring rates, their expansion of office space, their dollars raised or in client acquisition and retention. Fieldglass, for example, went from 195 employees in August 2013 to about 280 employees when it was acquired in March 2014. The company said it has plans to hire 120 more employees in Chicago before 2014 even ends. Additionally, Fieldglass is more than doubling its headquarter space with a move to a 58,000-square foot space at 111 N. Canal. Right now the company occupies 21,600 square feet between its Naperville and Chicago offices.
Just like Fieldglass went through a stage of hyper-growth (and continues to grow exponentially), several Chicago companies are poised for the same fate of exiting successfully in the near future. When and how they do it - whether through an IPO or an acquisition - remains to be seen, but here are our bets on the companies most likely to exit based on their high-growth rates.
[ibimage==39503==Original==none==self==null]
Built In Chicago uses six publicly and privately available databases, self-reported statistics and reports from CBRE to source its data .
Local growth will lead to local exits
Overall, the above companies have added about 1,225 jobs to the Chicago tech ecosystem in the past year alone. Each of these companies have their own aggressive hiring agenda this year. These hiring sprees are also fueling a flurry of real estate expansion and relocation: Ifbyphone and bswift have already doubled the number of square footage they each occupy locally in just the past year. Just like the local investors behind many of these hyper-growth companies are giving companies room to scale, local commercial real estate firms like CBRE and JLL are making this growth a reality by helping the companies find room to grow internally.
This insane amount of growth in terms of hiring and square footage alone is enough to suspect several of these Chicago tech companies to profitably exit over the next several months. Our speculation is that the trend of more and more Chicago tech companies exiting will only pick up in the latter half of this year and into 2015.
National exits are on the rise, too
Nationally, tech exits are picking up as well: 2014 is the biggest year so far for IPOs since 2000. The surge is causing many to cry "tech bubble," pointing to absurdly high valuations like WhatsApp’s $19 billion exit. But experts like Mary Meeker reported the number of tech companies that IPO’d last year was 87 percent below the numbers for 1999 and the total valuation of tech IPOs is 73 percent lower than in 1999. But no matter where experts stand on the tech bubble spectrum, no one questions that today’s tech ecosystem is churning out some high-growth companies with well-crafted products.
Chicago is no exception to that. The companies above, all which are likely to exit in the near future, are proof of Chicago's fast-growing tech ecosystem, an ecosystem that promises to generate (and locally reinvest) capital as it matures.
