Fund Makes Investment in Lake County Software Company to Help Create 55 New Jobs
CHICAGO – In an effort to provide critical capital to help early stage companies grow, Gov. Rod R. Blagojevich today announced a $500,000 investment in the ARCH Development Fund, a venture capital fund providing pre-seed and seed stage capital for high-growth, start-up companies based on cutting-edge technology and research. As a result of this partnership, ARCH will invest in Akoya, Inc., a Northfield-based product cost management software company, which also has an office in Peoria, that will allow the company to grow and create more good paying jobs in Illinois. The state contribution comes from the Illinois Department of Commerce and Economic Opportunity (DCEO).
“Since many of tomorrow’s jobs will come from new technology spin outs, we need to provide entrepreneurs with the tools they need to turn cutting-edge research into successful new companies. By creating a business environment that encourages innovation and addressing a critical shortage of this type of venture capital, promising firms with great potential like Akoya are getting the resources they need to build their businesses and create high-paying, new jobs,” Gov. Blagojevich said.
ARCH Development Partners, LLC is a seed stage venture capital fund combining operations and investment experience to address the void of seed venture capital in the Midwest. ARCH's model is to partner with universities and communities to create start-ups from world-class technology, including biotechnology/life sciences, wireless, software and technology infrastructure. ARCH will use the state’s investment to invest in Illinois-based companies like Akoya that are in need of seed stage capital. ARCH has invested $450,000 in Akoya to date.
Akoya will use an additional $500,000 in funding to support a growing customer-base for its Cost Management Analytics™ (CMA) and allow for further market penetration. Initially developed at Caterpillar, Inc., Akoya CMA is a unique software platform that enables manufacturers to reduce the cost of purchased components by analyzing part-features as well as transactional data. Customers include Caterpillar, who recently implemented Akoya’s CMA to help reduce its direct materials spend. Akoya currently has 15 employees and projects this number to double by the end of the year. The company anticipates employing 70 by the end of 2007.
“The success of our initial sales and marketing efforts continues to validate the Akoya business model. Akoya CMA is quickly being positioned as a very viable alternative for improving product margins and getting products to market faster. The additional investment will really help accelerate our growth by allowing us to focus on markets such as automotive, aerospace and high-tech. I thank Gov. Blagojevich for the state’s contribution to help make this happen and to keep us growing in Illinois,” said Ted Greene, CEO of Akoya.
“I cannot overstate the need for seed stage capital in Illinois to advance start-up companies in the state based on new, state-of-the-art technology. This second round of investment in Akoya is critical to keeping the company growing right here in Illinois because, without this kind of funding, companies like Akoya will go elsewhere. I commend Gov. Blagojevich for stepping up to address this need in Illinois, which is a lifeline for many fledgling companies,” said Thomas Churchwell, Managing Partner of ARCH Development Partners.
In 2005, Illinois captured just 1.1 percent of the $22.38 billion of venture capital invested nationally, and seed and early stage venture capital, which are critical to keeping start-up companies afloat and growing, are even more difficult to come by. Last year, Illinois reported roughly $38 million in seed and early stage capital, just 0.9 percent of the national total, and significantly behind states such as California ($1.8 billion), Massachusetts ($406 million), Texas ($217.5 million) and Pennsylvania ($108.7 million). This data comes from the PricewaterhouseCoopers and National Venture Capital Association MoneyTree™ Report.
The state’s investment in the ARCH Development Fund comes from DCEO’s Illinois Seed/Angel Fund, which will be used to invest in other seed stage venture funds in Illinois. This is money that will be invested by professionals in promising companies throughout the state. These investments in Illinois funds will not only work to help small businesses grow and create jobs, but will also help to keep these companies in the state.
“Gov. Blagojevich and I strongly believe that in order to create good jobs we must be strategic about providing our young, tech-driven firms with the resources they need to develop into economically viable and sustainable companies. World-class research is taking place across the state, and too often this research is leaving Illinois because we lack the critical, early stage dollars to move these companies forward. This investment will help to get the ball rolling in what we hope will be a stronger investment climate in Illinois,” DCEO Director Jack Lavin said.
Gov. Blagojevich’s Opportunity Returns regional economic development strategy is the most aggressive, comprehensive approach to creating jobs in Illinois’ history. Since a one-size-fits-all approach to economic development just doesn’t work, the Governor has divided the state into 10 regions – each with a regional team that is empowered and expected to rapidly respond to opportunities and challenges. Opportunity Returns is about tangible, specific actions to make each region more accessible, more marketable, more entrepreneurial and more attractive to businesses. It is about upgrading the skills of the local workforce, increasing the access to capital, opening new markets, improving infrastructure, and creating and retaining jobs. Opportunity Returns is about successfully partnering with companies and communities, both large and small, to help all of Illinois reach its economic potential.