Over the past decade, Chicago has quietly become one of the fastest-growing technology hubs in the United States. According to data from the Illinois Science & Technology Coalition, tech employment in the city has grown by more than 25% since 2015, outpacing national averages and attracting billions in venture capital. The rapid growth of Chicago tech industry is not only transforming Fulton Market into a hub of innovation—it’s also reshaping how small business acquisitions unfold across the region.
This article explains how Chicago tech industry growth is creating a ripple effect across the market. Specifically, it is influencing valuations, fueling mergers and acquisitions (M&A), and opening new opportunities in non-tech sectors. We will also explore the key drivers behind this boom and its impact on both first-time buyers and seasoned investors.
The Current Boom: Key Drivers of Chicago’s Tech Growth
Talent and Educational Pipeline
- Chicago awarded over 10,300 computer and information sciences credentials (degrees, certificates) in 2023 alone — the third highest in the nation (a 79% jump since 2020.
- Local universities (University of Chicago, Northwestern, Illinois Tech) feed a steady stream of developers, data scientists, AI specialists, and engineers.
- Combined with reskilling programs and bootcamps, the region’s workforce capacity lowers hiring risk for tech-enabled acquisitions.
Cross-Industry Digitalization
- Tech is no longer siloed — close to 50 percent of “tech jobs” in Chicago are in non-tech industries (finance, healthcare, logistics)
- That means even traditional small businesses (e.g. in manufacturing, logistics, professional services) are increasingly integrating software, analytics, and automation.
Investment, Government Support & Innovation Hubs
- Chicago-based VC and innovation programs bridge capital and startups in the region.
- State initiatives such as Illinois’ Innovation Voucher program inject public funding into R&D for local firms.
- Innovation hubs like 1871 and mHUB provide physical infrastructure, prototyping labs, mentorship, and community, making it easier for tech ventures (and spinouts) to scale.
“Chicago’s startup ecosystem is no longer just about scrappy entrepreneurs—it’s about scale-ready companies attracting national and global attention.” – Illinois Technology Association
📌 Related Insight: This growth is a key reason why acquiring a Chicago tech business is a top opportunity, as highlighted in the Technology & Software section of our article, Top 10 Industries to Buy a Business in Chicago in 2025.
From Startups to Acquisitions: How Chicago’s Tech Growth Fuels M&A
Here’s how that plays out:
Exit Path for Founders
- After early growth with angel/seed funding, many startups and niche software businesses seek exit options. For instance, acquisitions by strategic buyers are a predictable path.
- In Chicago, many tech startups began as back-end or B2B services (supporting other businesses), making them natural bolt-ons for larger firms
Hence, acquiring a Chicago tech business becomes a top opportunity for buyers wanting to step into a market with proven customers and tech assets.
Technology as a Value Multiplier in Non-Tech Businesses
- Buyers of non-tech small businesses are increasingly influenced by the growth of tech industry in Chicago; for example, a logistics company with route optimization software or a healthcare practice with in-house data analytics can now command a premium.
- As Chicago’s tech structures mature, these embedded capabilities create new multiple expansion (i.e. higher valuation multiples) for businesses that combine domain and tech.
Strategic Acquisitions by Larger Players
- Established Chicago firms and mid-caps are on the hunt for tech-enabled growth, recognizing that acquisitions tied to the city’s expanding tech industry offer a faster path than building capabilities from scratch.
- For example, global corporates maintain innovation or development centers in Chicago, making local acquisitions easier.
These trends mean that small businesses with some tech backbones are increasingly attractive.
Top Tech Sub-Sectors Ripe for Acquisition
- SaaS & vertical software — e.g. niche tools for real estate, logistics, legal, Medtech. These are high-margin, scalable, and prime for bolt-on acquisition.
- Fintech and Insurtech are thriving in Chicago, where major players already operate, and the growth of the local tech industry makes smaller fintech firms natural acquisition targets.
- AI / ML / Data analytics — As every business seeks smarter operations, boutique AI/data firms with domain specificity (e.g. retail-analytics, health data) become coveted.
- Quantum / advanced computing — The region was designated as a U.S. quantum tech hub, accelerating startups in quantum hardware, algorithms, and microelectronics.
- Industrial IoT / manufacturing tech — mHUB and Chicago’s longstanding manufacturing base intersect in opportunities to digitize industrial operations.
These sub-sectors often have lean teams, recurring revenue, and defensible intellectual property — ideal for acquisition.
The New Profile of a Chicago Business Buyer
Hybrid Domain + Tech Appreciation
- Buyers no longer need to be coders but must understand software and data dynamics — the difference between owning an HVAC company and owning an HVAC + predictive maintenance software company is material.
- Many buyers partner domain experts’ team with technical co-founders/integration partners.
Willingness to Take on Integration Risk
- Acquiring a business with tech means managing platform consolidation, data migration, cybersecurity, and hiring.
- Savvy acquirers build “acquisition integration playbooks” and partner with systems integrators (often locally in Chicago).
Longer Time Horizon, Higher Multiples
- Buyers must often accept slightly longer horizons (2–4 years) before realizing returns but also anticipate higher multiples if the tech scaling plays out.
- They also must be comfortable with intangible asset risk: software, intellectual property, customer churn.
Challenges and Future Outlook of Chicago’s Digital Economy
Valuation Overheating & Competition
Talent Retention & Cultural Risk
- Acquired tech teams may leave if culture or equity incentives don’t align. Integration risk is real.
- Ensuring continuity of key engineering or product leadership is critical.
Market Saturation & Exit Timing
- In a maturing ecosystem, many acquisition opportunities may already be snapped up by others, pushing buyers to find more creative niches (or go further into suburban Chicago).
- Timing is key: entering a market too late can compress returns.
FAQ’s
Because technology-enhanced businesses often possess recurring revenue, scalable models, and intellectual property — all of which drive higher valuation multiples. In Chicago, tech growth amplifies that by increasing competition and expectations around digital capability.
Yes — many traditional small businesses are adopting software, analytics, automation, or integrating with tech partners. That makes them more attractive to buyers seeking a hybrid of domain and technical strength.
Often small to midsize (e.g. $500K–$5M in EBITDA) businesses that have or plan to embed technology. Because start-ups and smaller firms are more flexible and open to acquisition, this is where many early entrants operate.
For more breakdown of the most promising sectors for investment, read our article about Top 10 Industries to Buy a Business in Chicago in 2025, which explores high-growth areas like Chicago’s food and beverage sector and other opportunities shaped by these economic trends.
Conclusion
The Chicago tech industry growth is more than just a local success story—it’s a fundamental shift that’s reshaping how small business acquisitions take place in the city. From startups in Fulton Market to logistics firms tied to O’Hare, the opportunities are diverse and expanding.
For entrepreneurs, investors, and corporate buyers, the lesson is clear: Chicago’s future is increasingly tech-driven, and those who understand this trend will be best positioned to identify and seize the right acquisition opportunities.
Selected sources & further reading: World Business Chicago (tech workforce & output), Chicagoland Chamber of Commerce (The Chicago Tech Effect)
