Insurance-backed VC firm launches in Iowa, hopes to raise $125M

Des Moines. (Carl Wycoff/Flickr)

(This story has been updated)

A new venture capital firm officially launched in Iowa this week.

David Miles and Matt Kinley, two Des Moines-based investment veterans, have started ManchesterStory Group and aim to raise $125 million.

ManchesterStory, which has closed on $31 million so far, will focus its investments on fintech, healthcare and insuretech startups.

“We want to go very deep in a couple of core categories,” Kinley said.

Investing in those sectors also builds on their past deals and networks. Miles is the owner of asset management firm Miles Capital while Kinley is the executive vice president at Pappajohn Capital Resources.

“In addition to ready-made deal flow from our past relationships, we’ve also got the (Global Insurance Accelerator) developing here … and a number of our backers, our financial backers, are insurance companies as well,” Miles said.

Although based in Des Moines, ManchesterStory will look for deals nationwide. The firm will mainly invest in companies that are post-product and post-revenue, but will evaluate earlier-stage deals.

Miles and Kinley declined to comment on ManchesterStory Group’s investors.

The Business Record reported, however, that six insurance companies have backed the firm.

ManchesterStory has 13 backers, according to filings with the SEC. It has yet to invest in any companies.

While they would not provide specific dollar amounts, Miles and Kinley said they intend to make Series A and Series B-sized investments.

“We don’t define it by the size of the checks going in, we define it by the development of the company,” Miles said.

The firm is likely looking to make 15 to 20 investments over a three to five-year period, Kinley said.

Miles said raising $125 million is necessary to truly make ManchesterStory an institutional fund.

“We intend to create an institutional capability to manage venture capital that sits in Des Moines, Iowa,” he said. “To do that you have to have resources, to have those resources…you’ve got to have a fund of appropriate size in order to attract and retain the talent.”

They are also considering applying for an Iowa tax credit program that would certify them as an “innovation fund” for investments made in Iowa. Investors in certified funds can receive tax credits worth 25 percent of their investment in Iowa companies.

If it received the certification, ManchesterStory would only be the third fund to do so.

While investing in Iowa companies is not the firm’s main motivation, Miles said there is a benefit to startup communities having more locally-based venture capital.

“I don’t know what we will invest in (and) what we won’t invest in, but we’re excited to be part of that growing ecosystem of folks who are willing to invest capital into startups that are based here,” he said.

Matthew Patane is the managing editor and co-founder of Clay & Milk. Send him an email at mpatane@clayandmilk.com.