Below is a brief guest column Mike Trotzke, CEO of Cheddar, wrote for Bloomington’s local newspaper, The Herald Times.
From limestone quarries and furniture factories to Indiana University and Cook Group, Bloomington’s economy has had a variety of drivers over the years. Now, we see hints of what may shape Bloomington’s next phase of economic success– and it comes from technology companies.
Our billing software company, Cheddar, recently raised $1.25 million from investors to launch into high-growth mode. You might say, “Big deal — that’s just one, small company.” But, Cheddar’s success isn’t isolated. The financing is a result of two trends shaping our economic landscape– budding technology startups here in Bloomington and an increasing number of Midwestern investors with the experience to support them.
Over the last decade, Bloomington has quietly built 20–30 small, high-growth companies, many similar in potential to Cheddar. Technology startups like Periodic, Mavenly, or Bee Corp have remained low in headcount, focusing their attention on refining products to be sold all over the world. Unlike typical service or manufacturing businesses that might steadily grow over the course of their lifetime, technology startups tend to mature at rates relative to their funding. Online software, once dialed in, becomes significantly easier to scale than physical goods or services.
The second trend shaping Bloomington is the rise of Midwest venture capital funds wanting to invest in high-growth companies. Just five years ago, Cheddar would have had to take a long shot in places like San Francisco with investors that had little incentive to invest outside of their area. Now, Bloomington companies can drive to Chicago, Cincinnati, St. Louis and other Midwestern cities to secure investment from firms like M25 Group and Connetic Ventures.
Combined, these two trends catalyze economic opportunity. Indianapolis is a prime example of an economy invigorated by startups and investors. Over the last few years, Indy’s technology sector has brought money into its city, created thousands of technology jobs at triple the rate of the national average, and propelled the capital forward. It’s easy to see the shift driving through downtown Indianapolis– their tallest building was recently renamed to “Salesforce Tower” to represent one of the city’s largest technology companies. Salesforce now employs over 1,000 people with plans to add 800 more over the next few years.
Cheddar’s funding could mark a turning point towards similar economic diversity here in Bloomington, but it will take support from the community. We should not try to be Silicon Valley or Indianapolis, but Bloomington should leverage these trends to enhance our unique, creative culture, strengthen our nonprofits and grow local business. The investment in Cheddar was one of the first times that a local technology company received funding from venture capitalists outside of our state, and that means a lot more than just cash flowing into Cheddar. Outside investors will visit the city to monitor companies, ask about other investment opportunities, and begin to invest in more of our startups.
Cheddar has high aspirations. It may or may not reach its full potential. Regardless, investing in high-growth Bloomington companies means investing in the future of Bloomington’s economy, jobs, and community, making our city more sustainable and ensuring it continues to be a great place to work, play, and raise families.
That’s good for all of us.