The Destination

Inc.’ s No. 48 Surge City is as bullish on medical startups as it is on its new wave kraut and beer.

Cleveland is a hotbed of breweries, boutiques, and biomedical startups.

STARTUP NEIGHBORHOOD

Trendy Ohio City is an entrepreneurial hotbed with indie boutiques, about a dozen craft breweries, and two popular co-working spaces: Beauty Shoppe, 1 in the circa-1876 Seymour Building, and Limelight, which houses mobile payment app Mezu and Wisr, a networking platform for college alumni. Cleveland has worked hard to shed its “Mistake on the Lake” reputation, especially downtown, where millions have gone toward converting empty office buildings into lofts, retail space, and restaurants. In the Terminal Tower on Public Square, co-working space StartMart 2 hosts 24 businesses, along with its own accelerator and micro venture capital firm Flashstarts. East of downtown, St. Clair-Superior is a once-blighted area now on the upswing. Tyler Village, 3 a sprawling industrial campus, hosts Cleveland Flea, a weekend bonanza of 170-plus vendors, along with eclectic small businesses, like vinyl pressing plant Gotta Groove Records 4 and frozen-fruit-pop maker Chill Pop. 5

WHERE TO TALK SHOP

For your caffeine and grease fixes, grab a nitro cold brew on tap at local roaster Phoenix Coffee Company and a Reuben pizza at Masthead Brewing Company 6 on Superior Avenue—and then, to undo it all, detox with a cayenne-infused Immunity juice at Restore Cold Pressed.

After work, hit Porco Lounge & Tiki Room, 7 near the historic Tremont neighborhood, for a Singapore Sling. Less than 10 minutes east is the Spotted Owl, where founders gab over $2 Miller Lites. Scarf an open-faced Sloppy Joseph at TownHall, 8 the city’s first non-GMO restaurant, and then cap the night with a Chillwave Double IPA at Great Lakes Brewing Co.

RED FLAGS

Because it’s spread out geographically, “Cleveland has a density problem,” says Paul McAvinchey, co-founder of Product

Collective, a media startup that hosts an annual threeday conference for software developers. “You’re not likely to often bump into people who might help you.” Matt Rodak, founder of Fund That Flip, a startup that offers short-term loans to house flippers, says the number of investors in Cleveland remains small, so do the math: “Some will say maybe,” Rodak says of investors, “and even fewer will say yes.”

$ 66,409 Average salary for a software developer in Cleveland. Source: Glassdoor

COMPANIES TO WATCH

Platform Beer Co., 9 co-owned by Paul Benner and Justin Carson, uses data to power its mini brewing empire, which includes four unique taprooms in the state’s biggest metros and a steady flow of new small-batch beers. Yuval Brisker, who sold TOA Technologies to Oracle in 2014, co-founded Mezu, which has raised $10 million to engineer the ultimate fintech fantasy: allowing people to give and send money anonymously, without sharing their personal information. Prerevenue startup

Augment Therapy, founded by longtime physical therapist Lindsay Watson, uses augmented reality—via a video game—to get kids doing targeted physical therapy.

TALENT PIPELINE

Alumni of Case Western Reserve University’s startup incubator, Sears think[box], include FGC Plasma Solutions, which aims to improve jet engine efficiency with plasma, Beauty and the Bolt, a STEM nonprofit geared toward young girls, and Lumen Polymer, which invented a bandage that comes off easily after exposure to ultraviolet light. Cleveland Clinic 10 and University Hospitals 11 are renowned for bringing biomedical and health IT startups to market, including Cleveland HeartLab, a cardiovascular diagnostic testing company acquired by Quest Diagnostics in 2017. Cleveland Culinary Launch and Kitchen hosts a new manufacturing and warehouse space, Cleveland Food Hub, and has helped launch some 200 food startups since 2013. They include Cleveland Kraut, which wooed its first backer while handing out eight-ounce tubs of sauerkraut to tailgaters at a Browns game. They’re now sold at Target and Whole Foods.

RECENT EXITS

LED lighting technology company Mr Beams to Ring, now owned by Amazon, for an undisclosed sum (2018) Electronic prior-authorization service CoverMyMeds to health care distributor McKesson, for $1.3 billion (2017) Health care cloud-computing platform Explorys to IBM, for an undisclosed sum (2015)

NOTABLE FUNDING

$145.7 million BioMotiv (pharmaceutical accelerator) $59.1 million ViewRay (MRI-guided radiation therapy) $50 million RVshare (Akron-based peer-to-peer recreational-vehicle rental platform)

68 Number of medical device, health IT and services, and biotech exits in Northeast Ohio since 2001. Source: BioEnterprise