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RAYGUN raises $582,000 to continue expansion, plans to open 2 new stores in 2019

February 13, 2019

RAYGUN has raised $582,000 in equity financing to accelerate its expansion into other Midwestern cities.

Mike Draper, founder and owner of RAYGUN, sold off 20% of the company for the $582,000 to what he called “non-managing members.”

“We’ve begun to look at phase 3 of expansion for the company, going into other cities and growing a little bit faster,” said Draper. “Over the last year or so, we kind of examined our options for the best way to go about that.”

The raised money will help speed up RAYGUN’s expansion, allowing them to open up new stores throughout the Midwest. RAYGUN plans to open stores in two new locations by the end of 2019, Draper told Clay & Milk.

“We’ve been opening one store every 18 months or so and would just like to be moving a bit faster,” Draper said. “Our wheelhouse is the Midwest. Any city in the Midwest that could possibly sustain our store, it’s on our list.”

The company currently has stores in four locations—Des Moines, Iowa City, Cedar Rapids and Kansas City.

“The other reason to raise money was to spend some time to focus on what the next five years are going to look like,” Draper said. “We kind of explained to people as we were raising money that we’re not pivoting to anything new. We want to take what has been going well the last several years and just do more of that.”

Tags: RAYGUN

RAYGUN raises $582,000 to continue expansion, plans to open 2 new stores in 2019 | Clay & Milk

A central Iowa ag-tech accelerator has secured more backers and finally has a name. The Greater Des Moines Partnership first announced the accelerator last year, naming four initial investors. On Monday, the Partnership said the program will be called the "Iowa AgriTech Accelerator" and named three new investors. The new investors include Grinnell Mutual, Kent Corp. and Sukup Manufacturing, all Iowa companies. They join investors Deere & Co., Peoples Co., Farmers Mutual Hail Insurance Co. and DuPont Pioneer. Each investor has agreed to put up $100,000 for the first year of the accelerator. Startups entering the program will receive $40,000 in seed funding in exchange for 6 percent equity. Tej Dhawan, an angel investor and local startup mentor, is serving as interim director until the AgriTech Accelerator names a permanent leader. Dhawan held a similar role with the GIA before Brian Hemesath was named as managing director. As interim director, Dhawan said his main job includes hiring the accelerator's executive director, establishing a business structure and initial recruiting for the first cohort. The accelerator will place few filters, such as location and product, on the applicant pool, Dhawan said. "When you’re seeking innovation, innovation can come from every corner of the world so why restrict ourselves," he said. One area the the AgriTech Accelerator won't recruit from is biotech. For its first cohort, the AgriTech Accelerator will work out of the GIA's space in Des Moines' East Village, Dhawan said. A future, permanent home is still to be decided. The accelerator's program will host startups from mid-July through mid-October, ending with an event connected to the annual World Food Prize. The GIA, which the AgriTech Accelerator is based on, also ends with presentations at an industry event. The accelerator has also started lining up a mentor pool. The Iowa Corn Growers Association, Iowa Soybean Association and the Iowa Pork Producers Association have agreed to provide mentors, as has Iowa State University. While the AgriTech Accelerator is loosely based off of the GIA, it will differ in its business structure, Dhawan said. The GIA runs through a for-profit model for both operations and its investment fund. The AgriTech Accelerator will have a nonprofit model for its operations and a for-profit setup for its fund. Dhawan said the nonprofit model is being used so the accelerator can better work with other nonprofit partners, such as trade associations. "These are all organizations that are nonprofits and can be amazing stakeholders without ever having to be investors in the accelerator," he said. "It becomes easier to work with trade associations in their nonprofit role when we are also a nonprofit." When it's up and running, the AgriTech Accelerator would be one of a handful of ag-focused startup development programs in Iowa. Others include the Ag Startup Engine out of Iowa State University and the Rural Ventures Alliance from Iowa MicroLoan. Matthew Patane is the managing editor and co-founder of Clay & Milk. Send him an email at mpatane@clayandmilk.com.

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