OnXMaps, a fast-growing tech company in Missoula, was founded in part because of the vast public lands in Montana..

Investors are starting to see gold in the Treasure State’s hot tech scene, and Missoula is playing an ever-increasing role.

Montana businesses attracted more than $83 million in venture capital funding in 2017, a one-year total that’s three times the sum of all venture capital invested in the state between 2010-2016, according to the financial data company PitchBook.

And 2018 is looking like it may be even hotter. Already this year, a Missoula-based mapping tech company called OnXmaps landed $20.3 million in venture capital, which is a record for a single company in the state.

On March 19, Next Frontier Capital of Bozeman, which bills itself as the state’s most active venture capital fund, opened a Missoula office as the University of Montana begins plans to build an Innovation Campus near its main campus.

Next Frontier Capital (NFC) has participated in more than $98 million worth of investment in companies with a Montana presence over the past three years, including investments in Missoula companies Orbital Shift, Clearas Water Recovery, OnXmaps and Submittable.

"In the last three years, our investments have confirmed that Montana is home to quality entrepreneurs previously ignored by the broader VC market, and great investment opportunities exist to source and lead venture class deals,” said NFC managing partner Richard Harjes. “Missoula is helping lead the way in validating both of these hypotheses.”

Late last year, Blackfoot Telecommunications in Missoula announced the launch of a “high tech innovation program” that the company said would focus on partnering with local and global tech startups, investment firms, economic development programs, educators and research enterprises affiliated with the Montana University System.

This past February, the University of Montana unveiled plans to build an Innovation Corridor that will connect the Montana Technology Enterprise Center on East Broadway with a proposed Innovation Campus across the river in the motor pool area to the east of Washington-Grizzly Stadium. The proposal is still in the planning process, but UM officials have spoken with members of the Missoula City Council about collaborating.

University of Montana President Seth Bodnar said in a statement that NFC’s move is good news.

“Next Frontier Capital's new office is yet another great example of the vibrant and growing entrepreneurial ecosystem in Missoula,” he wrote. “The University of Montana's Accelerate Montana programs — including the Blackstone LaunchPad, MonTEC, the Montana Code School, and the Montana World Trade Center — provide terrific resources for talented and innovative Missoulians to build impactful, high-growth businesses. We're incredibly excited to see Next Frontier Capital open an office in Missoula and we look forward to continuing to work with them and many others to make Missoula a hub for entrepreneurship and new business development."

Les Craig, the managing partner for NFC, said the company decided to open an office in the MonTEC building after recognizing the significant role Missoula is playing in the state's growing venture space.

“The decision for us to open an office in Missoula is driven by the success of our portfolio companies in Missoula and the great potential we are seeing in early-stage opportunities in the region," he said. "Our goal is to spend more time in Missoula and to be more involved with the start-up community through events such as the Hellgate Venture Network, 1MC Missoula, the EPIC Pitch Competition, and the John Ruffato Start-up Challenge.

"We will also be collaborating with MonTEC to offer office hours and host workshops to collaborate with local entrepreneurs who are working towards raising their first round of venture funding.”

Submittable, a downtown Missoula-based software company, was another tech firm that was able to boost its revenue and workforce through a partnership with Next Frontier Capital.

“Next Frontier Capital is playing an essential role in the Missoula start-up ecosystem by providing access to capital for growth,” said cofounder Michael FitzGerald. “Their investment in 2015 helped us raise follow-on funding in May of 2017 which has allowed us to double the size of our team in less than two years. A stronger Missoula presence will allow (NFC) to see and invest in even more of the great start-ups that are developing in our growing ecosystem.”

Craig said that NFC recently closed its second fund, worth $38 million.

“A Next Frontier Capital presence in Missoula is a testament to the exciting progress of Montana’s startup ecosystem,” he said. “Just as entrepreneurs in Bozeman and Missoula are starting to attract investment from large VC firms on each of the coasts, we are aware of the need to help high growth potential start-ups in other areas such as Whitefish, Kalispell, Butte and Billings get connected to national networks and sources of capital."

He believes that a greater Missoula presence is just the beginning of more "great work to be done" across the state.

"We’re looking to invest in Montana’s most intelligent and driven founders, and it doesn’t matter what city or town they call home," he added.

A study commissioned by the Montana High Tech Business Alliance (MHTBA) last year found that the Alliance’s member firms expect to add a combined 1,100 new jobs in Montana. That works out to a yearly job growth rate of 18.5 percent, which is significantly higher than Montana’s total employment growth rate of 1.3 percent in 2016.

“The growth trajectory of Montana’s high-tech industry has far exceeded our expectations when we began collecting this data in 2015,” said MHTBA executive director Christina Quick Henderson.

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