A venture fund in the Midwest just closed a $20 million round in hopes of fueling the region’s burgeoning tech ecosystems.
Omaha-based Dundee Venture Capital announced its Fund III on Tuesday, which will be used to bolster seed and early-stage tech companies in the e-commerce, B2B SaaS and consumer network industries.
Dundee also announced a new strategic partnership with Chicago’sLakewest Venture Partners to help extend the potential reach and value of the fund. As part of the partnership, Lakewest co-founder and principal David Mann has joined Dundee as a partner.
“There are amazing founders with amazing resources coming out of all sorts of cities in the midwest — not just Chicago, not just Omaha, and not just Minneapolis,” Mann said (pictured below, middle). “It’s Cincinnati and Madison and Detroit, and a whole handful of others. But there’s a tremendous amount of groundswell of activity [in the Midwest]. We are poised to find as much of it as we can and be as value-additive and helpful as we can.”
Dundee was founded by Mark Hasebroock in 2010 and joined by founding partner Beth Engel in 2013. Together, they have built a portfolio of investments some 30 companies strong — including startups like Fooji, Inventables, and Built In. Lakewest Venture Partners also counts about 30 investments in their portfolio, 22 of which are based in Chicago, like the recently acquired Food Genius.
According to Mann, both Dundee and Lakewest’s existing investments will continue to be managed independently throughout their completion. The new financing has been collectively raised, and all Fund III investments will be managed in partnership.
Part of Dundee’s drive for accessible capital stems from Hasebroock’s own struggle to raise capital for the Midwestern companies he himself founded: GiftCertificates.com and Hayneedle Inc., the latter of which is now a part of Walmart.
“Although it’s certainly improved greatly over the last handful of years, the one piece of the recipe that was missing for a number of years was the capital,” Mann said. “Mark specifically could point to the fact that when he founded his companies, it was next to impossible to raise the funds he needed by going to local VCs. … But he knew it didn’t have to be that hard. And that was ultimately what led him to starting in the world of VC himself: trying to be that capital source for founders like him who shouldn’t have to look elsewhere than where they are.”
Mann said that time has served the Midwest well. As VC funds like Dundee and Lakewest have opened up access to local capital sources for otherwise geographically isolated founders, they’ve also put a focus on other resources mission critical to building a company, including networking opportunities with other founders, proximity to potential customers, and, importantly, access to top tech talent.
“We’re now creating the resources around [founders] so they don’t have to leave to effectuate their vision. You don’t have to leave the undergraduate engineering program at the University of Illinois and head to Silicon Valley in order to create a company like PayPal,” Mann said. “You can do that right here because the rest of the resources are now becoming more and more available.”
In addition to the fund, Dundee also plans on opening an office in Minneapolis this year.