Covering the Land of Lincoln

Biz Bits: Report sheds light on Nebraska startup investments | Business Local

Last year was the best year ever for Nebraska startups in terms of money raised from investors, with 40 deals that injected more than $300 million into these growing companies.

And according to Invest Nebraska, a public-private partnership that invests in and mentors startup firms, that pushed total venture capital raised in the state past the $1 billion mark over the past decade.

Invest Nebraska recently released a report analyzing where that money came from and what companies it went to.

There were a few notable points from the report that stood out.

One is that the vast majority of the deals are small investments that come at the pre-seed and seed stages. Of 269 total deals over the past decade, 201 were of the early-stage variety.

Of course, those deals only totaled about $158 million, or less than 16% of all the money raised. The 68 later-stage deals were worth $843 million. And the 22 Series B deals, which were for companies that have proven market demand and substantial sales, garnered nearly $537 million.

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Another interesting tidbit from the report is the types of companies that get the most deals and the most money. Business-to-business software companies had the most deals, with 101. On the other hand, the hardware, robotics and advanced manufacturing category had the fewest deals, 12, but got the most money, $328.6 million.

One final interesting bit of information from the report: There have been 138 firms that have invested in Nebraska startups over the past decade. Of those, only 12 are based in Nebraska and only 14 others are even based in the Midwest. That means more than 90% of the companies investing in Nebraska startups are from outside Nebraska, and about 80% are from outside the Midwest.

To see the full report, go to: investnebraska.com/2022-venture-report.

Lincoln startup ranking down

All that venture capital momentum did not help Lincoln when it comes to how its startup ecosystem ranks compared with other Midwest cities.

The city dropped two spots to No. 21 in the 2022 Best of the Midwest: Startup Cities Rankings, which are put together by Victor Gutwein, founder and managing partner of venture capital firm M25.

It’s not really clear from the data why Lincoln saw it’s rank decline, but I will note that a number of other Midwest university towns, including Fargo, North Dakota; Champaign, IL; and Ames and Iowa City in Iowa saw much larger drops.

Lincoln continues to rank highly among cities of a similar size, beating Des Moines, Sioux Falls, Wichita and Cedar Rapids, while trailing Madison, Wisconsin; Ann Arbor, Michigan; and South Bend, Indiana.

You can see the full report at: tinyurl.com/2prh5y92.

More cheap broadband in the Cornhusker State?

Nebraska already has fast and relatively cheap broadband internet. In fact, a recent report from Uswitch found that the state has the second-cheapest broadband in the country when measured by price per megabits per second.

The report said Nebraskans pay 6 cents for each megabit of speed on average, a rate eclipsed only by California, where residents pay 4 cents per megabit.

I’m guessing a lot of that has to do with the expansion of Allo, which is now in dozens of cities large and small around the state. The company has provided competition to larger, more entrenched providers, which has forced them to upgrade their services and get more aggressive with pricing.

But now Allo itself could face some stiff competition from a company with some of the deepest pockets in the world.

Google Fiber announced earlier this month that it will expand into five states, including Nebraska.

In an Aug. 10 blog post, Google Fiber CEO Dinni Jain said the company has been “talking to city leaders” in Arizona, Colorado, Nebraska, Nevada and Idaho.

Only Arizona so far has a publicly identified city (Mesa) and timeline (work started in July).

Jain did say in his blog post that the five states, “will be the main focus for our growth for the next several years.”

A follow-up email to Google Fiber’s media representative got me exactly zero additional information. If I had to guess, I’d say it’s probably Omaha or an Omaha suburb such as Bellevue that Google is targeting, but I guess we’ll just have to wait to find out.

Listing the lists

Regular readers of this column know I like to end it with a rundown of recent rankings of Lincoln and/or Nebraska in national reports. The latest:

* Fifth-best city for renters (WalletHub)

* State with the third-lowest energy costs (WalletHub)

* State with the 11th lowest credit card debt (WalletHub)

Interactive: 13 charts that show how the economy is performing in Lincoln and Nebraska

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