Some healthy indicators for Wisconsin’s high-growth economy

Some healthy indicators for Wisconsin’s high-growth economy

MADISON – Whether it’s new companies raising money, established firms moving to the next stage or investors reporting strong returns, there have been some solid harbingers for Wisconsin’s early stage economy in the past month or so.

While it remains to be seen whether the trends continue, the collective news is encouraging – especially for people who recall leaner days for Wisconsin’s tech-based economy.

Young companies raising money: An impressive mix of companies, mostly touching on health care, have reported raising rounds of angel and venture capital.

Madison and Milwaukee-area companies with ties into health care delivery, information or monitoring were Promentis Pharmaceuticals ($8.7 million); Titan Spine LLC ($7.5 million); HealthMyne ($6.9 million); Catalyze ($6.5 million); Moxe Health ($5.5 million); Kiio ($927,000) and Allergy Amulet ($880,000).

Also reporting a major investment was EatStreet, the online food search and delivery service based in Madison ($11 million).

Companies moving to the next stage: Three companies launched in Madison within the past 10 years are growing.

PerBlue, the mobile gaming company started in Madison in 2008, sold its “DragonSoul” role-playing game to GREE International Entertainment for $35 million. The company will remain in Wisconsin and will focus on developing other games to add to its popular array.

Nordic Consulting, which has focused on working with many users of Epic’s health care information systems, has grown to 700 employees or consultants and about 175 clients nationally since its founding in 2010. The Madison-based company has reported raising an undisclosed amount of money from Boston-based Silversmith Capital Partners and a group of banks through a minority recapitalization.

The deal signals Nordic’s intention to diversify, not only in terms of the services it offers, but in the types of clients and health information platforms it will serve.

Propeller Health has raised $21.5 million from a mix of investors, which will continue the growth of that company in the respiratory ailment space.

Early stage investors raising money: HealthX Ventures, a Madison-based venture capital firm with a focus on digital health, announced in early October it has raised a $20-million fund for its early sage investments.

The Badger Fund of Funds continues to report progress. This fund was born with a state of Wisconsin investment contingent on a private match, which its managers – Sun Mountain Kegonsa – have raised. The purpose of the “fund of funds” is to serve as an umbrella for smaller regional funds that will make mostly seed investments in young companies across Wisconsin.

In time, the Badger Fund of Funds plans to launch six seed funds – five of which are already in some stage of organization – to invest in pre-revenue startups.

At least one other early stage fund is organizing, 30Ventures, which will be led by veteran investor George Arida.

Investors showing returns: Early stage investors enter that risky business because they hope to make money. Sometimes, lots of money. It doesn’t always work out that way because company failure rates are high, but one Wisconsin investor group has reported gains of late.

Golden Angels Investors LLC, a Brookfield-based group that invests in young companies, took the unusual step last week of disclosing its investment performance. Golden Angels’ internal rate of return, or IRR – a common metric used by such groups – stands at 16.87 percent. That’s according to Tim Keane, director of Golden Angels.

That means Golden Angels’ members who put money into all 13 of the investments that have come full circle for the group since 2003 had an annual return of 16.87 percent, net of their costs. By way of comparison, the Standard & Poor’s 500 index had an annual total return of 8.87 percent during that same period. Golden Angels is one of the state’s two largest angel networks with 95 members.

There’s no escaping the fact that Madison and Milwaukee companies and investor groups have been central to the latest spate of news. Extending that kind of economic activity to the rest of Wisconsin remains a sometimes elusive goal, but there are remarkable success stories in the Fox Valley, Chippewa Valley, Rock County and beyond.

Success breeds success, and Wisconsin is producing more examples to build upon.


Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal.