Technology
Chicago's Supply Chain Expertise Powers Next-Generation Tech Startups Globally
Deep ties to manufacturing and rail networks give local startups an edge in solving real-world supply problems that pure software hubs rarely touch.
How we reported this
Chicago startups raised $2.3 billion in the first six months of 2026, with more than half the deals tied to enterprise software and freight logistics platforms.
The funding surge arrives as companies worldwide scramble to rebuild supply chains after repeated disruptions from Red Sea shipping attacks and typhoon damage in Asia. Chicago firms already sit at the center of North American rail and trucking networks, so their tools reach customers faster than prototypes built in coastal labs.
Hubs on the West Side and in the Loop
1871, the incubator inside the Merchandise Mart at 222 W Merchandise Mart Plaza, now hosts 450 companies focused on industrial IoT and procurement software. Two blocks west, mHUB at 965 W Chicago Ave runs a hardware accelerator that pairs founders with local machine shops in the Kinzie Industrial Corridor. Both programs require participants to test products on actual factory floors or rail yards within 30 days of entry.
City data shows 1871 graduates created 4,800 jobs between 2023 and 2025, while mHUB companies filed 62 patents last year alone. Average rent for a shared bench at mHUB runs $650 a month, well below comparable space in Boston or San Francisco.
Next Steps for Founders
Companies seeking to enter this network should attend the next 1871 demo day on August 19 at the Merchandise Mart, where logistics operators from Union Pacific and BNSF review pitches. Early registration closes July 28.