NFC Q1 Newsletter: 18 Investments to Date, $141m Total Invested in Our Companies, First Exit in 2018, and MT Continues to be Hot

Next Frontier is executing on our mission to partner with entrepreneurs to build Montana technology companies of impact, utility, and value, while adding Colorado and its vibrant ecosystem to our mandate.

Please find below an update on our portfolio and some exciting detail regarding MT's continued growth and development.

Fund II is off to an strong start with one exit to date and a portfolio of quality MT and CO companies, backed by some of the industry’s leading Funds. In 2018, Fund II made six new investments and, most notably, saw our first exit, Ataata (acquired by Mimecast). 2018 was also Les Craig’s first full year in the partnership and he is proving perhaps our best investment yet.

Over the life of the Firm, we’ve seen True, Venrock, Amgen, BMW i Ventures, Toyota, Millenium, Summit, Bessemer Venture Partners, Steve Case’s The Rise of the Rest Fund, The Chernin Group, and Foundry Group, among others, invest in NFC companies. The influx of capital into our companies to date, is making it possible for founders to build, fund, and scale industry leading companies in our market.  

Across Fund I and Fund II, NFC has attracted over $120M of syndicated investment and a total of $141M capital invested in our portfolio companies, including NFC’s paid-in-capital. This represents a co-investment ratio of $5.71 for every dollar that NFC has invested in our region.

Before NFC started,  MT attracted ~$4-5m per year, and we are proud to note that Pitchbook reported $83m in MT venture funding.

As a result of our activities to date, the Fund, for the second year in a row, was recognized by CB Insights as the most active investor in Montana over the last five years. 

We are executing on our mission and are positioned as the investor of choice in our market.

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NFC's portfolio is now 18 companies strong:

  1. SiteOne Therapeutics, Bozeman and San Francisco

  2. Submittable, Missoula

  3. Clearas, Missoula

  4. Quiq, Bozeman

  5. Orbital Shift, Missoula

  6. Phoenix Labs, Vancouver and Bozeman

  7. OppSource, Minneapolis and Bozeman

  8. Remix Labs, Redwood City

  9. Blackmore Sensors, Bozeman

  10. IronCore Labs, Boulder and Bozeman

  11. Ataata, DC Area and Bozeman

  12. onXMaps, Missoula and Bozeman

  13. TwinThread, Virginia and Bozeman

  14. Section.io, Boulder

  15. The MeatEater, Bozeman

  16. Alpin.io, Boulder

  17. OptioSurgical, Denver

  18. PatientOne, Missoula

Montana is Hot

Bozeman, Missoula, and Montana remain hot. For the second year in a row, Policon named Gallatin County (home to Bozeman) as the country's strongest economy of its size, see article here.

Bozeman International just announced a 9th straight year of record passenger traffic. The airport handled 1,340,857 passengers last year, an 11.8 percent increase from the year before, according to an airport news release. Annual passengers have almost doubled in the past 10 years and account for about 30 percent of all airline passengers coming in and out of Montana. During 2018, the airport expanded its year-round offerings to include daily, nonstop flights to Portland, San Francisco, and Los Angeles. Flights to Denver and Phoenix/Mesa also became year-round flights, and the airport started offering a number of seasonal daily flights.

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MT Continues to Attract Major Company Operations and Investment
Companies investing in MT operations include the following: ClassPass, Perficient, Lexis-Nexis, FICO, Oracle, SoFi, Figure, Workiva, FLIR, Boeing, Applied Materials, Kampgrounds of America, Dataminr, Cognizant, and Intertek.

Notable recent Montana PE and M&A activity includes:

  • Elixiter, Bozeman (Acquired October 2018 by Perficient, NASDAQ: PRFT)

  • Advanced Technology Group, Missoula (Acquired September 2018 by Cognizant, NASDAQ: CTSH)

  • Wisetail, Bozeman (Acquired by Alchemy Systems in 2017, Alchemy acquired by Intertek Group LON: ITRK in August 2018)

  • Printing for Less, Livingston/ Bozeman ($25M Growth stage investment from Goldman Sachs, April 2018)

Nationally acclaimed professional service partnerships with top tier technology companies include the following: Medallia and Qualtrics (commonFont - Bozeman), SalesForce (Now it Matters - Bozeman), Marketo (Elixiter - Bozeman), and Oracle (Helix - Dillon).

Montana State University Innovation Campus

In the fall of 2017, Montana State University broke ground on the MSU Innovation Campus, a 42-acre research park. The Applied Research Lab has the potential to attract hundreds of millions of new research dollars to the MSU research enterprise, as well as encourage the commercialization of new technologies being developed in the photonics, optics, and microsatellite research clusters.

MT High Tech Sector: $1.7bn in Annual Revenues

Established startup clusters in SaaS, bio-tech, and photonics continued strong development in 2018. In March of 2018, the Montana High Tech Business Alliance reported that Montana hit a significant new milestone: tech companies generated more than $1.7 billion in annual revenues and were reported to be growing at rates nine times faster than the statewide economy, according to the University of Montana Bureau of Business and Economic Research. The Montana High Tech Business Alliance (MHTBA) now boasts over 320 member firms that where projected to add over 1,100 new jobs in 2018, an expected 18.5% increase. Jobs at businesses who are MHTBA members pay considerably more than jobs elsewhere in the Montana economy. The median annual salary at MHTBA businesses reported in 2018 was $63,000, more than twice the median salary per Montana worker as measured by the Census Bureau’s American Community Survey.
 

NVCA and Regional Venture Capital and Venture Capital University

In addition to our work in Montana and Colorado, we are also working with the NVCA and others to highlight the growth and impact of regional venture capital. Steve Case’s Rise of the Rest Fund, Drive Capital in Ohio, Arthur Ventures in North Dakota, and other regionally focused firms are working with NFC to build the case for regional venture as a source of both return to LPs and a critical driver of economic growth. Will chairs the NVCA Regional Capital Working Group and NFC plans to continue to work with our regional peers to help research, support, and highlight the national impact of investing in traditionally capital starved markets.

Come visit. We'd love to show you around Montana.