From Illinois Business Journal news services
CHICAGO – Illinois will invest more than $220 million in emerging tech companies that will create an estimated 3,600 jobs during the next three years, state Treasurer Michael Frerichs said Tuesday.
He made the announcement at 1871, the home of more than 350 early-stage, high-growth digital startups, located in The Merchandise Mart in Chicago.
Frerichs said the investments will be made in technology funds with an emphasis on emerging Illinois companies. The goal is two-fold: support technology and related jobs here in Illinois and earn investment returns for state residents. Frerichs is the state’s chief investment officer.
“This investment recognizes Illinois’ emergence as a tech leader,” Frerichs said. “These dollars will fund promising entrepreneurs who will use the money to hire others in the furtherance of their dream and the betterment of our tech community and overall economy.”
The Illinois Growth and Innovation Fund investments will occur during the next three years. The investments will be spread across 15-20 funds and no more than 15 percent of the money will be placed within the same fund. An advisory board will provide guidance and transparency.
The more than $220 million will come from existing investments and is not entangled in the state budget impasse that involves the General Revenue Fund. The investment is expected to attract more than $400 million in private-sector money, which will further spur interest in the Midwest tech scene that Illinois anchors.
“TDA I has been a valuable resource for retaining successful businesses and expanding the Illinois technology ecosystem,” said 1871 CEO Howard A. Tullman. “TDA II builds on the success of TDA I and helps ensure that Illinois remains an attractive place for tech entrepreneurs to grow their businesses and create new jobs.”
Legally called Technology Development Accounts (TDA), lawmakers in 2002 authorized the initial investment. The funding led to successful Illinois companies including SpotHero, Trunk Club, Sittercity and Diagnostic Photonics. Lawmakers in 2011 authorized a second round of TDA funding, which will begin later this quarter, the Treasurer’s Office said.
TDA I created an estimated 3,900 jobs (1,200 direct and 2,700 indirect), according to results compiled by previous administrations. Based on that performance, TDA II should create 3,600 direct jobs and thousands of indirect positions, the Treasurer’s Office said.
50 South Capital, a subsidiary of the Northern Trust Corp., was selected to administer the program following a public bidding process.