Epic Systems is a business many people have never heard of, and yet touches most of our lives. The business - founded and managed out of Verona, Wisconsin since 1979 - creates software systems for health records and by its own estimates, 305 million people have health records stored within Epic. The company had $6.7 billion in revenue last year and employs around 14,000 people. It has never taken venture capital, never been acquired, and never gone public — and so, by the measure most commonly used to describe modern startup success, Epic is not actually a unicorn and it never has been.
That’s the problem with counting unicorns. The definition is narrow, and sometimes it can miss some of the best stories. That's a fact worth pondering before we consider the numbers in this report.
NOTE: If you're interested in the entire list, we added that at the very end of this story. You can search and sort as you wish!
For this story we decided to go wider than our usual six states, and pulled every billion-dollar company Dealroom holds on record across the entire Midwest: Illinois, Indiana, Michigan, Minnesota, Ohio and Wisconsin as usual, plus Iowa, Kansas, Missouri, Nebraska, North Dakota and South Dakota. The total is 115 unicorns, of which 99 of those crossed that mark between 2016 and September this year, the most recent being Caddi as we shared in last week's funding report. These numbers make a good headline, and are the kind of thing that ends up in a press release. But when you look deeper at how each of those companies actually got over the billion-dollar mark, the numbers demonstrate something other than a decade of momentum around startup formation.
Half of these companies were not raising money when they were ‘minted’
We took the funding event Dealroom records to designate the year each was minted, and there are four distinct things are taking place here.
That last row is the one that should give any of us who write about this pause. Thirteen companies never had a private billion-dollar event at all. They were already listed, and their market value effectively drifted over the line. Exact Sciences, AtriCure, Protolabs, Inspire Medical, Sprout Social, Enova, Green Thumb, Xeris and Workiva all became unicorns - in the sense the word is used here - by way of a good quarter on the public markets.
When considered like this, our regional story becomes less a wave or single sequence of events.
The late 2010s were an era of sale, not of raise: Acrisure, Clarios, Aldevron and OneStream were bought out, while FleetMatics, TransFirst, CoverMyMeds and Endocyte were all acquired. Established regional companies were being repriced by buyers, but the unicorn count gives the sense that something new has been born.
Then 2020 and 2021 - which we often refer to as the ‘free money’ period and are discussed as a single bubble - but based on these numbers it was nothing of the sort. In 2020, six of eleven mintings came from a company going public — four IPOs and two SPAC mergers. In 2021, sixteen of twenty-eight came from a private round.
Missouri is a sharp illustration of these anomalies. Three of its six — Nerdy, Benson Hill and Latch — crossed a billion dollars through a SPAC merger, all within five months of each other in 2021. This implies a financing trend which SPACs definitely have been at various points, because whatever that year could be considered to be measuring in St. Louis, in hindsight it wasn’t the maturity of the local pipeline.
Chicago has a venture ecosystem. Most of the region runs something else.
The data on the route these businesses took to reach unicorn status separates the states more sharply than anything else.
Looking only at private rounds, the bottom half of the ledger is too thin to argue with — six states have three companies or fewer, and a single deal can swing the percentage by fifty points. But the top is solid. Chicago is the only place in the region where private capital is the normal way a company reaches a billion dollars, and it’s not even close. Everywhere else, a company is more likely to get there by being bought or already listed when its market cap passed the magic mark. Minnesota's profile is its own thing entirely — a third of its unicorns crossed as public companies, which is probably what should be expected of a state with a high concentration of Fortune 500 successes, and an innovation economy predominantly clustered around medical devices.
None of which means Indianapolis or Minneapolis are doing worse than Chicago, however. It simply means they are operating differently, and a count of unicorns will disproportionately highlight outliers. That’s what unicorns are, after all.
What the count doesn’t identify
Standard venture capital narrative framing assumes a company that raises, then scales and exits. A company that grows on its own revenue and stays in family hands is invisible to this story, no matter how large it gets or how many people it employs. Any count built on capital events naturally measures capital events. It does not necessarily measure value, although interestingly, the fluctuations in unicorn minting by year correlate closely with overall funding numbers.
Despite all this, the count is worth keeping. We will keep using it, here and in our funding data coverage, because a shared yardstick beats no yardstick at all and 115 unicorns is genuinely more than most people outside our region would guess. The more useful question is how they got there. It is a question that can tell us considerably more about whether an ecosystem is compounding or not. It is the column we will be watching most closely when we run these numbers each year.
The full list of Midwest unicorns
