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Spurred by local business and community leaders, specialized startup accelerators are forming across Iowa to capitalize on the specific strengths of the regions they serve.
For example, Des Moines is home to the headquarters of Allied Insurance and the Principal Financial Group Inc., and a significant location for Wells Fargo Home Mortgage. The area has one of the highest concentrations of finance and insurance-related employment in the country. In addition, 40-miles north of Des Moines in Ames, is Iowa State University, a major agricultural R&D center. With these assets in place, much of the tech startup activity in central Iowa is focused on creating innovation in finance, insurance and agriculture.
The Rise of Insurance-Tech
In February, Des Moines fintech startup Dwolla announced a new $6.8 million investment round. The company has already raised $35 million from investors throughout the country, including actor, investor and Iowa-native Ashton Kutcher.
After witnessing the success of Dwolla and other fintech companies, and anticipating similar activity in the insurance industry, several local insurance companies pooled resources in Des Moines to form the nation’s first insurance technology—or insurtech— accelerator.
In its third year, the six-company, current cohort of the Global Insurance Accelerator in Des Moines hail from Belgrade, Boston, Detroit, Munich, Toronto and Tucson. The accelerator is giving Des Moines insurance leaders greater access to the technology that could change the industry.
Grinnell Mutual Reinsurance Company is one prime example. Grinnell Mutual is a 100-year old company headquartered in Grinnell, Iowa, a town of less than 10,000 people. In 2016, Grinnell Mutual led investments in seed-stage financing rounds for two insurance technology startups: one which analyzes truck driver performance, and one which helps insurance agents more effectively market themselves online. Grinnell Mutual plans to deploy the startups’ technologies in its own business, and believes the technologies have potential for further adoption in the insurance industry.
The Rise of AgTech
Iowa produces more corn, eggs, pork and soybeans than any state, and now the state is also making a play to be the center of agtech.
The American Farm Bureau Federation has held an agriculture startup competition for three years, and teams from Iowa have won it twice. Both winning teams featured alumni from Iowa State University’s College of Agriculture and Life Sciences, who also participated in the college’s Agricultural Entrepreneurship Initiative program.
With this national leadership established, in 2016, two new AgTech accelerators announced they were forming in central Iowa. One will be headquartered in Des Moines, and its sponsors include DuPont Pioneer and John Deere. Iowa State University is organizing the other in Ames, and its sponsors include a number of local agriculture companies.
In addition, leaders of a new local venture capital fund in Des Moines recently announced plans to raise $100 million for investment in agriculture startups. This significant development bodes well for the future of the region’s entrepreneurial community.
Strategic planning for the future
In central Iowa, there’s ongoing collaboration between entrepreneurs, community leaders and the local business community to take the steps necessary to foster a sustainable innovation economy. Places like Gravitate, an incubator with locations in Des Moines and Ames, are celebrated and encouraged. The region is aware of its strengths and taking measured, planned steps to build on from them.