National technology headlines in 2022 will be awash with news about web3, blockchain, crypto and the metaverse, as well as decentralized finance, and autonomous and electric vehicles.
Those trends will likely impact the local technology and startup industry, too. But more broadly, Milwaukee-area businesses will continue to focus on digital transformation, including automation, cloud migration, cybersecurity and artificial intelligence, and take a hard look at new technologies to optimize their supply chains.
Additionally, various stakeholders will continue making the case for building the region's tech hub, which will include bolstering its venture capital ecosystem, building a pipeline of diverse tech talent, and supporting startups with resources and opportunities.
Here are five trends to watch in the Milwaukee-area technology and startup ecosystem this year.
For technology and startup news throughout the year, check out Wisconsin Inno, the Milwaukee Business Journal's sister publication that covers innovation around the state. Subscribe to The Beat, a free, twice-weekly Wisconsin Inno newsletter.
1. Venture capital activity
Wisconsin is steadily making strides in attracting venture capital investment in local companies, but it has a long way to go before catching up with neighboring Midwest states, let alone the coastal tech leaders.
With several notable new venture funds recently formed in the area, 2022 could bring substantial progress.
2021 brought the close of a $40 million fund of funds by NVNG, a private Wisconsin firm aiming to increase venture capital investment in the state by investing in other venture funds on behalf of Wisconsin institutional investors; an oversubscribed $13.5 million fund by Gateway Capital Partners, a firm focusing on early-stage companies in Milwaukee County that impact low- and moderate-income communities; and a $30 million fund by Character, a new Milwaukee venture capital firm co-founded by two former Google Ventures partners.
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We'll be watching how those dollars get invested, as well as which Wisconsin and Milwaukee-area startups raise venture capital rounds from other investors this year.
Additionally, the Wisconsin legislature voted not to include a proposed $100 million public-private fund of funds in the state's most recent budget, but it's possible the fund could be created through separate legislation in the new year.
2. Acquisition deals
The flip side of venture capital investment is the startup exit, so we'll be watching which Wisconsin companies get bought or possibly head for an initial public offering.
We'll also be tracking merger and acquisition deals by large local technology companies including Fiserv Inc. and Zywave Inc., which have both said acquisitions will continue to be part of their growth strategies.
Finally, we'll be keeping an eye on Epic Systems Corp. in Verona. The private electronic medical record software company's biggest competitor, Cerner Corp., will be sold to Oracle Corp. for $28.3 billion in a deal expected to close this year, raising questions about whether a Silicon Valley tech giant might seek to buy Epic Systems. However, Epic Systems founder and CEO Judith Faulkner is reportedly adamant about keeping the company private.
3. Technology talent
Labor shortages were a hallmark of 2021 across industries, but the market for technology talent is particularly tight. The U.S. unemployment rate for technology occupations was 2.6% in November 2021 compared with 4.2% across all occupations, according to data from the U.S. Bureau of Labor Statistics and the information technology industry association CompTIA Inc.
Companies across industries throughout the Milwaukee area have said they're looking to fill technology-related roles as fast as possible. Wisconsin was among the top 10 U.S. states for increases in tech job postings between October and November, according to a December CompTIA report.
With the rise of remote work, Milwaukee companies have an opportunity to attract tech talent from other states and metropolitan areas. Additionally, as workers leave expensive coastal cities like San Francisco and New York, local companies have a shot at drawing them to the Milwaukee area.
The latter strategy has been seen to be particularly effective with workers who have previous connections to Wisconsin. For instance, Milwaukee native and software executive David Reeves moved back to the area in 2020 after years of living in California. He has since made Milwaukee his new permanent home and opened a Milwaukee office for his company, OpenGov, which is headquartered in Silicon Valley. The government software firm has committed to hiring at least 100 Milwaukee employees by 2024.
4. Continued efforts to build the region's technology hub
There have been numerous and ongoing attempts over the years to boost the area's reputation and track record as a technology and startup ecosystem, including by groups like the MKE Tech Hub Coalition, the Milky Way Tech Hub and the Wisconsin Startup Coalition.
Most recently, the Metropolitan Milwaukee Association of Commerce (MMAC) announced a multi-pronged startup initiative that in 2022 is expected to launch a mentorship program modeled after one developed at the Massachusetts Institute of Technology.
Additionally, the Wisconsin Technology Council is in the early stages of convening an effort to prepare to compete for federal funding that's expected to become available to help regions across the U.S. compete with coastal tech behemoths.
5. Supply chain technology
Given the supply chain constraints that dominated much of 2021 and the acceleration of e-commerce as a result of the pandemic, companies will very likely be looking to optimize their supply chains, in part by implementing logistics technology.
Local companies working in this space — such as Brookfield supply chain software startup Part Analytics, which raised $3 million in 2021 — are likely to get more attention. However, as investors around the country pour money into logistics startups, local supply chain companies could find it hard to compete.
https://www.bizjournals.com/milwaukee/news/2022/01/04/things-to-watch-technology-startups-2022.html