Fund will support software startups in Iowa, Wisconsin, Minnesota
The Idea Fund of La Crosse, a venture capital firm based in La Crosse, Wis., has raised $31.5 million for a second venture capital fund targeting pre- and early-stage revenue startups in the three-state region of Wisconsin, Iowa and Minnesota.
According to Pitchbook, a resource for data, research and analysis on global capital markets, the fund is one of the three largest venture capital funds ever raised that is dedicated to investing in the three-state region. Pitchbook has also reported that venture capital fundraising has reached its lowest level in a decade, according to its Q1 Venture Monitor report. Fundraising for VC funds involves raising money from individual investors or institutional investors such as pension funds, college endowments, trusts and insurance companies.
Last week, Pitchbook Senior Editor James Thorne wrote that venture capital fundraising was a principal driver of the growth that VC firms saw in 2021 and 2022, with assets under management swelling 58% from $2.4 trillion to $3.8 trillion. But a recent analysis shows fundraising isn’t projected to see those levels again until after 2028.
Fundraising is expected to grow 2.9% annually through 2028, less than half the rate of other private capital strategies including private equity, private debt and real assets funds, Thorne writes.
“In a tough market, the new funding allows us to lean in, scaling our offerings and helping our portfolio companies move even faster and farther,” Idea Fund General Partner Jonathon Horne said in a prepared statement. “Challenging times can create great companies. With venture markets contracting, supporting our region’s most promising entrepreneurs is now more important than ever.”
In addition to closing on the fund, the Idea Fund has entered a partnership with Pablo Capital, a private investment syndicate representing a co-founder and early employees of Jamf, an Eau Claire, Wis.-based startup.
The new partnership aims to leverage the collective expertise and resources of both entities to support the growth of technology startups in the region. Jamf was founded in 2002 and launched its initial public offering in 2020. A news release said the IPO, which raised $468 million, represents the largest exit of a tech startup in Iowa, Minnesota or Wisconsin.
The fund will make initial investments of about $500,000 to $1 million in about 20 startups, with a focus on Wisconsin, Minnesota and Iowa. The Idea Fund announced the first four investments from the new fund:
- Golgix, Milwaukee, Wis.: Manufacturing artificial intelligence company serving manufacturers in food and beverage, consumer goods, paper products, plastics, chemicals, and pharmaceuticals and automotive.
- Distribution Depot, Brookfield, Wis.: E-commerce made for distributors in HVAC, plumbing, electrical and more.
- Lumberjack, Minneapolis, Minn.: Platform for property managers, real estate investors and others to coordinate, manage and schedule lawn, yard and snow services with a network of local professionals.
- Hopper Health, Washington, D.C.: Virtual primary care and health care navigation for neurodivergent adults, including autism, ADHD, obsessive-compulsive disorder, Tourette syndrome and dyslexia.
The Idea Fund’s investment strategy aims to leverage the three-state region’s “deep experience in traditional industries,” including agriculture, manufacturing, supply chain and health care.
“Emerging technology is enabling companies to serve their customers in ways never thought possible 10 or even five years ago. For leaders in our region’s traditional industries, this threatens to reshuffle the deck.” Horne said. “By layering sophisticated technical capabilities over our region’s deep industry expertise, we aim to invest in startups creating overwhelming value propositions.”
To learn more about the fund or inquire about partnership opportunities, Horne can be reached at jhorne@ideafundvc.com.
