For years, tech startups have been the antithesis to everything big business.
Startup employees wear hoodies instead of suits. They work from couches and coffee shops rather than desks or conference rooms. They see explosive, unchecked growth in place of hindering red tape and processes. Above all else, their youth alone is hyper-risky.
But with those risks come mammoth rewards, and that allure has led many established businesses to build out and amp up their digital tech efforts. From corporate venture funds to in-house accelerator programs and incubators, big businesses want in on the glitzy world of tech startups. As more businesses jump on that bandwagon, take a look at 6 startups that have already come out of some of Chicago’s original big biz tech innovators.
Redbox
Redbox, the popular DVD and video game dispenser at your neighborhood grocery store, can trace its roots to McDonald’s in 2002. The company quickly grew in both size and revenue, and was eventually sold to Coinstar in 2009 for upwards of $150 million. Since then, McDonald’s has ramped up its digital tech efforts. Earlier this year, for instance, the company introduced a startup pitch competition at 2015’s SXSW, where they fielded ideas from companies seeking to reinvent the traditional restaurant experience, advance content creation and co-creation, and mobilize transportation and delivery.
Aviary
New York’s cloud-based photo editor Aviary, which provides a web and mobile platform used by 100 million people worldwide, was acquired by Adobe last September. Aviary’s success is due in large part to one of the biggest businesses in the greater Chicagoland area. Walgreens, which is headquartered in Deerfield, has quietly joined the league of Chicago’s most prolific investment funds with its Well Ventures investment and capital growth division. In addition to investing in tech startups that support the company’s mission to “help people get, stay, and live well,” the company has also hosted a number of hackathons to spur innovation.
Rithmio
Rithmio, a gesture-recognition company that’s caught the eyes of many of Chicago’s most influential tech figures, was originally born out of the University of Illinois at Urbana-Champaign. But when the company moved into a second office in Catapult Chicago, a popular destination for startups looking to scale, they joined a long list of startups turning toward successful corporations for resources. Catapult, which offers both co-working space and accelerator resources, is a non-profit organization supported by Foley and Lardner LLP, an international law firm. According to the firm’s website, they help by “leveraging their experience, resources, and professional networks to further accelerate the successful growth” of the city’s startups. Catapult is also home to Chicago startups likes The Black Sheep and Supply Vision.
Packback
Packback, a student-founded and run e-textbook provider, has participated in more than one corporate-backed startup venture. Not only did the company have the chance to pitch on ABC’s Shark Tank, but the company was also once housed under Catapult’s roof. And the company once shared an office space with ContextMedia — the fast-growing health information services company whose reputable co-founders Shradha Agarwal and Rishi Shah also funded JumpStart Ventures, one of Packback’s investors. JumpStart Ventures has invested in many of Chicago’s most promising startups, from Spartz Media and Dialogtech to Base CRM, SwipeSense, BucketFeet, and Shiftgig.
Betabox
When Betabox, a startup that distributes product samples to specific consumers, was acquired by VaynerMedia earlier this February for an undisclosed sum, it became the next example of a corporate initiative turned successful startup. Betabox is the brainchild of Mondelez International’s 2012 Mobile Futures program, which aimed to create and incubate an innovative, mobile-centric idea for 90 days and foster an entrepreneurial spirit in the company’s employees. Headquartered in Deerfield, Mondelez is the name behind many multi-billion dollar pantry brands like Oreo, Nabisco, Cadbury, Milka chocolate, and Trident gum.
Doggyloot
Doggyloot, a company that collects deals from around the web for dog-related products, was acquired earlier this year by its competitor, GreaterGood. The company found its start at Sandbox Industries, a venture capital firm that specializes in connecting established corporations with innovative ideas across a number of industries. Sandbox houses a number of companies on-site, including in its healthtech innovator, Healthbox, which aims to provide accelerator programs, expedite market entry for healthtech startups, and introduce the Healthbox curriculum inside the country's top healthcare organizations.
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