Tech start-ups find a new home on the Great American Prairie
As Ben Milne sought money for the mobile-payment company he began developing here three years ago, investors responded with rejections by the dozens, John Eligon writes.business Updated: Nov 22, 2012 22:47 IST
As Ben Milne sought money for the mobile-payment company he began developing here three years ago, investors responded with rejections by the dozens.
Eventually, he coaxed $1 million from a pair of local investors. His app, Dwolla, has since attracted more than 100,000 users, and now moves $30 million to $50 million in transactions a month.
So when he decided to seek a second round of financing last year, Milne, a 29-year-old college dropout, had an easier sell.
This year, he announced that Dwolla had drawn $5 million more in capital from investors on both coasts, including Ashton Kutcher and a firm with Twitter and Foursquare in its portfolio.
From Des Moines to Omaha to Kansas City — a region known more for its barns than its bandwidth — a start-up tech scene is burgeoning.
Dozens of new ventures are laying roots each year, investors are committing hundreds of millions of dollars to them, and state governments are teaming up with private organisations to promote the growing tech community. They are calling it — what else? — the Silicon Prairie.
Fifteen to 20 mostly tech start-ups, are established each year in eastern Nebraska, a more than threefold increase from five years ago.
Today, there is more than $300 million in organised venture capital available in the state, as well as tax credits for investors; six years ago there was virtually none.
Google Fiber’s first ultrafast Internet connection drew about a dozen start-ups to a neighborhood in Kansas City, Kan.
Over the past seven months, about 60 start-ups have presented their ideas in Kansas City.
In Iowa, Startup City Des Moines, an incubator financed with $700,000, including a quarter-million dollars from the state, got applications from 160 start-ups over the past two years and accepted 9 so far.
Among recent start-ups are Ag Local, that created an online marketplace for trading meat; EyeVerify, which verifies identities via eye-vein patterns; and Tikly, that created a platform for bands to sell concert tickets. NYT