Skip to content Skip to sidebar Skip to footer

Great North Labs raises $23.7 million round, expands its focus towards Iowa startups

An early-stage venture fund with a focus on tech startups may have its sights set on Iowa’s startup market.

Great North Labs, a Minnesota-based fund committed to bringing capital to the Midwest, has raised its first fund with $23.7 million in capital to invest in early-stage tech startups.

Unlike many larger venture capital firms, Great North Labs is not hesitant to invest in early-stage companies and commonly invests in pre-seed rounds.

“Why are comfortable investing earlier than most VCs? We’re lead by a group of entrepreneurs and we have a background as angel investors,” said Ryan Weber, Managing Partner and co-founder of Great North Labs. “As a result of our backgrounds as operators, we feel very comfortable evaluating the market risk but also evaluating teams at early stages.”

The fund is split between pre-seed (10 percent), seed (40 percent), and growth equity (50 percent) and has a 5-year invest period. Great North Labs has already invested $3 million of the fund in startups throught the Midwest.

“For us, the capital isn’t really the problem with pre-seed investing,” Weber said. “It’s the time that goes into managing a portfolio of smaller investments. So while we are going to do a number of those, that’s why it’s capped at 10%.”

The firm plans on making on about 30 investments, with reserves for follow-on investments. Each investment will be around $250,000 to $750,000.

Since starting in 2017, Great North Labs has invested in 17 companies.

Investing in Iowa-based startups

Last month, Weber visited Iowa both for EntreFEST and Monetery. Great North Labs was one of eighteen VC firms to take part in the investor 1:1s at Monetery in Des Moines last month.

In addition, Great North Labs has brought on Geoff Wood as an advisor to help Great North Labs improve its connectivity with Iowa-based startups.

“I have been really impressed with what I’ve seen in Iowa. I see an incredible amount of momentum happening throughout the state,” said Weber. “I definitely see us doing more deals there going forward.”

To date, Great North Labs has invested in one Iowa-based company — Pitchly — in August of 2018.

“By the end of the year, I’m expecting we’re going to close a couple more deals in Iowa.”

Previous coverage

Pitchly completes seven-figure seed investment round —Aug. 21, 2018


Geoff Wood is the co-founder and Publisher of Clay & Milk

Great North Labs raises $23.7 million round, expands its focus towards Iowa startups | 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.
This Pop-up Is Included in the Theme
Best Choice for Creatives
Purchase Now