Mapping Michigan's Startup Exits

A look at recent momentum and economic impact in our startup community.

Feb 22, 2023

I’ve been thinking about the name I chose for this substack, Midwest Humble.

I’ve been thinking about what author Phil Cristman calls the “cultural amnesia” of the Midwest.

That essentially, a lot of cool shit happens here but we’re too humble to tell our stories. Without storytelling, we forget or lose our shared identity.

Within our startup community, a lot of cool shit is happening here.

This deep dive is dedicated to the cool shit, the momentum. It’s a start at mapping recent impact from our collective success. Please comment if we’ve missed anyone.

Mapping Startup Exits & Impact

When a startup exits in an ecosystem, it creates a ripple effect into a community. Whether it’s a billion dollar exit or a seed-stage exit, talent from those teams take away lessons learned on building and scaling a company.

When a startup exits, the shared knowledge created is priceless.

Talent often takes these lessons learned onto the next venture. More startups are created, more jobs, and more capital is re-invested into the community.

Rocket Fiber’s Exit in 2020:

5+ Startups, $130 Million Venture Raised

In 2020, Rocket Fiber exited to a larger ISP provider (yes, my husband Marc Hudson’s company). Former employees have spun-off five new startups with three in Michigan: Kode Labs (Series A), PlayVs ($106 Million Series C, LA based), CoverTree ($10 Million Dollar Seed), Marc’s own Hum (Pre-Seed), and Den (Pre-Seed, NYC based).

Duo Security’s Exit in 2018:

4+ Startups, $56 Million Venture Raised

We all know about Duo Security’s successful $2.3 Billion Dollar exit to Cisco about five years ago. Patrick Garrity mapped the impact of this exit. Talent has gone on to lead across the global cybersecurity industry. In Michigan, startups by Duo talent are abundant: AaDya (Seed), Pluck (Pre-seed), Blumira (Series A), and Censys (Series B). Based on the latest public Crunchbase data, these startups have raised $56 million in funding.

Startup Genome Report: A history of $100 Million Exits

According to the recently released Startup Genome report, an ecosystem sees a change in trajectory or momentum when a startup achieves a $100+ million dollar exit. The report dove deep into our Metro Detroit region.

On a webinar, the creators of the report shared a surprising statistic…

They found 12 Startups in the Detroit/Ann Arbor Ecosystem that exited for $100 Million+: Rivian, Covance, Duo, AllyGrow, Tetratherapeutics, Covisint, evisiontec, neumodx, foresee, get wisely, control-tec, anx.com. Note this doesn’t include Llamasoft, based in Ann Arbor, but sold and scaled up for a larger exit of $1.5 Billion in 2020. Note this list was shared on the webinar but is not listed in the report itself.

Recent Exits 2022-2023

At the end of 2022 and into early 2023, our Michigan startup community has experienced quite a few exits already including: Nutshell (Series A), Trustpage (Seed), Tome (Seed). It is likely too early to map out new companies forming from these exits just yet, but worthy to note the momentum here.

So what does this all say about us?

About us as a place, a community, and a startup ecosystem?

I think it shows the tremendous momentum growing in recent years.

That talent is learning how to start and grow here.

That this traction could lead to new industry leaders, jobs, and more cool shit happening.

That you should not underestimate the Midwest, or Michigan, right now.

The Startup Genome Report is an interesting read. It says founders self-report as not building global companies. Founders feel the same way about local investors, too. Ironically, founders feel investors are not risk-taking enough and don’t see our ambitions. Ecosystem leaders in the report seem disjointed, confused, and at times unhelpful. Perhaps collectively we aren’t thinking big enough. That in our Midwest humble means we’d rather keep our heads down.

I like to disagree.

I think we do have big ambitions.

We just don’t tell these ambitions to the world.

We need to keep supporting one another, creating community, investing in our founders, taking risks with them, and keep building together.