2018 held a lot of exciting news for Montana tech and manufacturing companies. From record investments to acquisitions to new support for startups, Montana is poised for even more development in 2019.
Our 2018 High Tech Industries survey found that Montana companies generated nearly $1.7 billion in revenues in 2017 and reported growth at rates up to nine times faster than the statewide economy, according to the study conducted by the University of Montana Bureau of Business and Economic Research.
The study found that Alliance members continue to grow, employing just under 6,000 Montanans and paying a median annual salary of $63,000, a five percent increase over 2016. According to the study, high-tech pays more than twice the median earning per Montana worker and represents the third highest-paying industry in Montana
Major Acquisitions Point to Future Job Growth
In September, global IT provider Cognizant acquired Advanced Technology Group (ATG) in Missoula. ATG, a Cognizant company, currently has more than 130 employees, but Tom Stergios, senior vice president strategy and corporate development for ATG in Missoula, said Montana can expect to see the company continue to add jobs in the state. Cognizant has committed to adding 25,000 employees in the US over the next 5 years and has been impressed by the strong pipeline of workforce entering ATG from the University of Montana in Missoula.
In October, digital consulting firm Perficient acquired Elixiter, a marketing technology company based in Bozeman. Elixiter’s team of about 40 employees brings expertise in the Marketo marketing automation software and will become one of more than 20 Perficient locations around the world. Elixiter founder Andrew Hull has said Perficient is dedicated to growth in Montana and the acquisition will expand opportunities for clients and employees.
Record Investments Fuel Growing Companies
Not only has venture capital investment in Montana increased significantly ($83 million in venture capital in 2017 - 10 times the amount available in 2015 - according to financial data company PitchBook), but 2018 brought a quick succession of high-profile investments for Montana high-tech firms, suggesting significant growth ahead in 2019.
In March, Next Frontier Capital in Bozeman closed its second round of funding, pooling a total of $38 million to inject into companies. The firm also opened a Missoula office in April 2018 and is looking at opportunities in Billings, Kalispell, and other Montana cities as well.
In February, Missoula-based outdoor technology company onX closed a $20.3 million funding round led by Summit Partners, a growth equity firm in California. onX opened a second office in Bozeman and now has nearly 70 employees with plans to add a few dozen more. Pitchbook named onX Montana’s most valuable venture backed company in 2018 with an estimated post-valuation of $120 million.
In March, Blackmore Sensors and Analytics in Bozeman raised an $18 million Series B round from BMW iVentures, Toyota AI Ventures, Millennium, and Next Frontier Capital. Blackmore will use the funding to scale production of its innovative lidar sensor used in self-driving cars. Founded in 2016, the firm has 65 employees and is among several promising ventures to emerge from the Photonics cluster supported by Montana State University in Bozeman.
In April, Livingston-based marketing technology company PFL secured a $25 million growth equity investment from Goldman Sachs. PFL opened its second headquarters in Indianapolis in March and also has teams in Bozeman and Billings. The company is building a new 55,000 square foot facility in Livingston for digital production and fulfillment. PFL has 300 employees and plans to add another 200 jobs, mostly in Montana, over the next three to five years.
Beyond investment, Montana companies received millions in grant money in 2018. Inimmune, a Missoula-based public-private partnership between the University of Montana and former GlaxoSmithKline employees, received $22.4 million in grants from the National Institute of Health this summer, most recently for researching and developing a more robust flu vaccine. Among other sources, the Big Sky Trust Fund and SBIR programs also continue to be an important fonts of funding for tech companies in Montana.
Strides for Women in Tech
This year, Montana saw a number of strides for women in tech, including new leadership roles, networking initiatives, and educational programs.
In March, Toby O’Rourke was appointed the new president of Kampgrounds of America in Billings (KOA). Originally from Sheridan, Montana, O’Rourke came to KOA in 2011 as the director of digital marketing. Over the next five years, she was promoted to vice president of marketing and was eventually named chief franchise operations officer in January 2016.
Six months after its investment announcement, onX hired former Amazon executive Laura Orvidas as the company’s new CEO in August. Orvidas brings 19 years of experience at Amazon to the Missoula-based outdoor tech company. She said onX was the perfect fit for her as she looked for a small, growing company in a desirable place to live.
atgSHE and onX co-hosted a speed-networking event in November. 55 men and women from Missoula-area tech companies gathered on the third floor of onX’s Missoula building to discuss diversity and inclusion topics in the workplace as well as network with other professionals in the area. ATG Director, Production Success & Expert Services Kym Corwin was excited about the turnout and anticipates more events in 2019.
A few weeks later, ChickTech Missoula held the second of two 2018 events to help high school girls consider a career in tech. Young women from Montana high schools were able to participate in expert-led workshops about mobile applications, soft circuits, and user experience. Chapter director Brigitta Lee said the nonprofit is looking forward to providing more opportunities to expose girls to working in tech and connecting them to tech mentorship.
Montana CEOs also had a roundtable discussion about how to hire more women in their companies. Read about four strategies they shared in February.
The Alliance is looking forward to more engagement on women’s issues in 2019, including working with local partners to help build women’s networking groups. If you’re interested in helping coordinate or becoming involved, please email katy.spence[at] mthightech.org.
Special Events Connect
The Alliance was proud to work with partners around the country to offer special opportunities for our members and other leaders in the tech community to meet with powerful decision-makers in 2018.
In April, the Alliance hosted a roundtable discussion between Senator Jon Tester and small Missoula tech companies. Business leaders brought concerns about state funding initiatives, compliance with GDPR, and attracting talent to the Senator.
In July, Congressman Greg Gianforte met with Missoula tech leaders, where the conversation was focused on training, hiring, and attracting talent to the Big Sky State. Companies regularly point to hiring as one of their main impediments to growth.
In September, Neal Kashkari, the president of the Federal Reserve Bank in Minneapolis, met with tech companies in Bozeman. The discussion highlighted Montana’s fast-growing wages, increasing access to capital, and challenging real estate market.
Finally, in November, the Alliance coordinated a meeting between University of Montana Provost Jon Harbor, university officials, and Montana tech companies to discuss opportunities and challenges in working together. Companies were optimistic and pointed to the high-quality interns that many get from the university, as well as opportunities to tap other potential schools of discipline for out-of-the-box talent.
The Alliance also hosted six roundtable discussions among Montana executives on topics like cyber security in Billings, planning for growth in Missoula, and computer science education in Helena.
New Programs Support High-potential Startups
Montana continuously ranks high on national lists for startup activity, and new initiatives in the state seek to support promising tech startups.
In March 2018, Frontier Angels kicked off its Early Stage MT program with three pitch competitions in Missoula, Bozeman, and Billings. Regional winners including Superior Traffic Services, Missoula; Sellout, Bozeman; Elation, Billings; WebBuy, Billings; Elebase, Whitefish; and Cardsetter, Billings attended a one-week hyper-accelerator program in July to fine-tune their business models and pitches to investors and then competed in a final showcase in Bozeman in September. Sellout and Superior Traffic Services tied for first place and each received $25,000. Pat LaPointe with Frontier Angels said they hope to expand the program in 2019.
In September, Montana also sent its first cohort to TechCrunch’s 2018 Disrupt conference in San Francisco – one of the world’s largest and most impactful tech startup events. Four Montana startups - WebBuy, Billings; Elebase.io, Whitefish, Triple Tree, Bozeman; and Audience Awards, Missoula – participated in a pavilion co-hosted by the Montana Governor’s Office of Economic Development and the Montana High Tech Business Alliance, giving them the opportunity to network with potential partners and investors in the heart of Silicon Valley.
Both programs support the future of Montana’s entrepreneurial ecosystem by ensuring tech startups have the business coaching and access to capital they need to become the next high-growth companies in 2019 and beyond.
The financial indicators in 2018 - record amounts of venture capital investment and major acquisitions - show that Montana’s fast-growing tech sector is not slowing down and that high-growth firms will bring more high-paying jobs, revenue, and capital expenditures in 2019. The health of Montana’s entrepreneurial ecosystem is also on display through increased resources for women and other underrepresented groups in tech, access to government and educational leaders, and visibility for the next generation of startups. All told, these five positive trends point to more growth for Montana’s innovation economy in 2019.
About the Authors: Christina Quick Henderson is executive director of the Montana High Tech Business Alliance and adjunct professor of entrepreneurship, management and organizational behavior in the College of Business at the University of Montana.
Katy Spence is the Communications Director for the Montana High Tech Business Alliance. She worked previously with the Missoula Current and Treesource, and has an Environmental Journalism Master’s Degree from the University of Montana.
About the Publisher: Launched in 2014, the Montana High Tech Business Alliance is an nonpartisan nonprofit association of more than 350 high tech and manufacturing companies and affiliates creating high-paying jobs in Montana.