Startups Venture

2019 Was One Of The Best On Record For Kansas City Startup Fundraising

The Kansas City Chiefs won the big game last night.

Subscribe to the Crunchbase Daily

In a now-deleted tweet, the nominal President of the United States congratulated the great state of Kansas on the win, but anyone paying attention would know that the Kansas City in question is not in Kansas, but Missouri.

Home to leading entrepreneurship and venture research and community organization Kauffman Foundation, the Kansas City, Missouri, has been a testing ground for new tech (like Google Fiber, when it launched) and innovation initiatives

Kansas City and the surrounding metro area is home to a bunch of startups, and 2019 was one of the best years on record for the city’s startup funding market with $169.4 million raised. In the chart below, we plot known deal and dollar volume in Kansas City and North Kansas City, Missouri, over the past five years.

Private market data is subject to reporting delays. It’s a virtual certainty that there were more than 21 deals struck in 2019, but it may take several quarters for those deals to be added to Crunchbase.

One of the companies contributing to 2019’s big dollar volume total was PayIt.

We hopped on the phone with PayIt founder and CEO John Thomson this morning to hear his thoughts on the area’s startup scene. His company’s $100 million Series B last March marked Kansas City’s largest funding round for all of last year.

Founded in 2013, PayIt aims to simplify doing business with state, local and federal governments through its mobile transaction and payment platform. It has 115 employees (the majority of which work out of its Kansas City headquarters) and saw its GAAP revenue grow by 300 percent in 2019, according to Thomson.

Insight Partners led its massive $100 million Series B last March (which was particularly huge compared to the company’s 2016 $4.5 million Series A).

That capital, he said, was “all about growth and R&D, and scale up of the business.”

Thomson believes there’s a lot of advantages to locating a startup in Kansas City. For one, he says, there are several good local universities that generate “a lot of computer science talent.” In addition, more than one large tech company (such as Garmin and Sprint) has a presence in the metro area.

“There’s also something special about the city, in how everybody tends to help each other out,” Thomson said. “There’s just a great midwestern work ethic as well.”

But in general, he said that he and his team believe that world-class tech companies can be built anywhere.

“We’re among several that are proving that out,” he told Crunchbase News. “It’s kind of like football. If you can play quarterback, the VCs will find you no matter where you are. The smartest money on both coasts realize there are great companies being built everywhere.”

David Hall, managing partner at Revolution’s Rise of the Rest Seed Fund, says his firm has been impressed with the maturity of the Kansas City tech ecosystem.

“Kansas City has all of the right ingredients—good universities, a strong corporate sector, and investors like Firebrand Ventures and KCRise, which are helping to build a strong foundation for startups,” he wrote via email. “We are very proud investors in BacklotCars and Replica, two companies that are respectively disrupting the auto wholesale market and urban planning.”

Illustration: Li-Anne Dias

Copy link