Milwaukee startup Scanalytics Inc. is moving its headquarters to Chicago.
Founded in 2013 by Joe Scanlin and Matt McCoy, the company developed floor sensor and predictive analytics technology used to measure human behavior. It has been applied to commercial buildings to save energy by turning on lights and HVAC only when an area is occupied. But the company has found the most success in deploying the sensors to gather data during business conventions.
Scanalytics has just landed a big contract with Chicago’s massive convention center, McCormick Place, which influenced its decision to move to the Windy City. The firm will install its smart floor system throughout the venue’s four-building campus, encompassing 2.6 million square feet of exhibit space near downtown Chicago. McCormick Place, which has more than 3 million visitors per year, will use the system to analyze visitor behavior such as movement and interaction with exhibitors, as well as apply usage patterns to drive energy savings. Scanalytics will also set up a showroom space at McCormick Place to demonstrate its technology.
“A lot of our customers will do their shows there, so we’ve had a lot of our experience with our customers at McCormick Place,” said Scanlin, chief executive officer, in an interview. “It made sense for us to have a conversation directly with McCormick because we saw a really big value in being able to not only show what’s happening at an individual booth, but also what’s happening at an entire show.”
"Providing quality data to trade show organizers and exhibitors makes McCormick Place and Chicago more competitive in attracting conventions, events and meetings," said Lori Healey, chief executive officer of the Metropolitan Pier and Exposition Authority, which operates McCormick Place, in a press release.
Rahm Emanuel, who worked to attract the startup to Chicago while he was mayor, lauded Scanalytics’ relocation in the announcement.
"Chicago's tech scene has grown tremendously over the past several years because of our deep talent pool, global connectivity, world-class infrastructure, affordability and amazing quality of life," Emanuel said. "We are thrilled to welcome Scanalytics to our thriving tech ecosystem and look forward to watching them grow."
An original Milwaukee tech startup
Scanalytics is one of Milwaukee’s most established startups, having steadily grown over the years to 20 employees here. It has formed partnerships with major tech companies including Intel and Cisco, and its customers include Raytheon Co., Qualcomm Inc. and Microsoft Corp.
The company has raised approximately $4.5 million in three investor rounds since inception, including an oversubscribed round last year that ended at $1.5 million, Scanlin said. In 2017, Scanalytics received a $200,000 Wisconsin Economic Development Corp. loan to fuel its growth which was not tied to job creation. It was certified as a Qualified New Business Venture by the WEDC in 2013, allowing investors in the company to receive up to $2 million in tax credits.
Scanalytics is also a portfolio company of Milwaukee- and Madison-based startup accelerator gener8tor, having completed its Madison program in 2013.
“I think it’s bittersweet to see the company moving to Chicago,” said Joe Kirgues, co-founder of gener8tor. “On the other hand, the company’s worked really hard and to have an opportunity to scale and the partnership with McCormick Place is a tremendous win and we’re happy for them and happy to see the growth. It’s clear that Chicago made a play to entice the company and use the opportunity for sales growth and partnership to make the case for it.”
Committed to growth in Milwaukee
Scanlin said most of Scanalytics’ 20 employees will remain in Milwaukee, where the company is seeking a new, larger office space to accommodate its growth. And it plans to hire another eight to 10 employees in both Milwaukee and Chicago over the next six months as it gears up for the McCormick Place contract and several other major contracts. It has not yet chosen a site for the Chicago headquarters, but Scanlin said it will be about 5,000 square feet of office space within blocks of McCormick Place.
“We’re not moving everyone that we have, all the bodies that we have here in Milwaukee,” Scanlin said. “We’re still absolutely committed to specifically the tech positions that we have open. I still see a large majority of those still being out of here in Milwaukee and Madison.”
In Milwaukee, Scanalytics is seeking to move from its 3,500-square-foot office in the Blatz building, 260 E. Highland Ave., to a 10,000-square-foot facility with space for larger scale sensor testing. It has looked at one of the buildings on the soon-to-be-vacated Paul Davis restoration site, at 2000 S. Fourth St.
“We’re doing hiring in both places, so even in Milwaukee, we’re considering where’s a good spot for us to be,” Scanlin said. “What we want to do here in Milwaukee is still have a lot of our R&D, if not all of it, is still going to happen here. Now that the spaces that we’re looking at and the contracts that we’re closing in the millions of square feet, we can’t get by with just hundreds of square feet of testing.”
The company hopes to contract with the Wisconsin Center just like it did with McCormick Place, though that hasn’t come to fruition yet, Scanlin said.
“We want to bring the same technology to Milwaukee, especially with the (Democratic National) Convention coming up,” he said. “We see a very obvious fit for not just providing analytics on how people were moving through and consuming the spaces involved with the convention, but for being able to serve that massive population more effectively.”
Asked whether Scanalytics is moving toward an exit, Scanlin said he’s more focused on pursuing these new opportunities.
“Now that we have a really interesting and, frankly, a much larger addressable market than I think I even originally expected when starting the company, I’m really excited about just continuing to be heads down in building that, so right now that’s not really a focus,” he said.