A 1-year-old venture studio headquartered in Albuquerque plans to stand up a $50 million investment fund, targeted at providing early-stage capital to startups it's helping spin into prosperous companies.
Adam Hammer, the president and CEO of Albuquerque's Roadrunner Venture Studios, announced the new fund at the studio's second annual technology forum, held in Downtown Albuquerque Wednesday. The tech forum hosted investors and founders from across the country for a series of panels on subjects ranging from tech commercialization to emerging technologies to the evolving venture capital landscape in the U.S.
The new investment fund's dollars come from a late 2022 commitment made by the New Mexico State Investment Council to America's Frontier Fund, a deep tech-focused national venture firm.
The State Investment Council (SIC) initially committed $100 million to America's Frontier Fund in October 2022. The national VC invested $10 million of that $100 million total in Roadrunner Venture Studios, which formally launched in Albuquerque late last year.
The America's Frontier Fund-backed venture studio is charged with finding promising technologies at national laboratories and research and development institutions in New Mexico and the broader U.S. and growing them from nascent startups into successful, established companies. It's named three such portfolio companies to date — Hydrosonics, a hydrogen tech startup; Fab.ai, an advanced manufacturing startup; and Inaedis, a biotech startup.
On Aug. 27, however, the SIC approved a restructuring of its initial $100 commitment to America's Frontier Fund, splitting its investment into two $50 million chunks.
One of those $50 million chunks is the new investment fund dedicated to Roadrunner Venture Studios, called Roadrunner Fund I. Those dollars, Hammer explained during the SIC's Aug. 27 meeting, will continue to fund the venture studio and provide pre-seed and seed investments — typically the earliest stages of investment for startups — into companies created by the venture studio.
The other $50 million chunk is for a new separate fund, called Frontier Fund I Alpha, which would invest in Roadrunner Venture Studios' portfolio companies past pre-seed investments, including seed, Series A and Series B-stage investments.
Frontier Fund I Alpha, as well, will receive matching funds from a federal program launched shortly after the SIC made its initial $100 million commitment. That program, a joint initiative between the U.S. Department of Defense and Small Business Administration called the Small Business Investment Company Critical Technologies Initiative, by matching federal dollars and "technology sector guidance" with investors to "scale public-private partnered capital and catalyze investment in critical technology areas," according to the Small Business Administration's website.
Money from Frontier Fund I Alpha could also be used to invest in companies not in the venture studio but that would set up operations in New Mexico, including new manufacturing facilities or offices, Louie added.
Pairing the new, venture studio-focused fund with the federally matched later-stage investment fund helps create a "capital supply chain" for startup's backed by Roadrunner Venture Studios, Hammer, the studio's president and CEO, told the Council.
"What we want to create is this seamless fabric from the labs, from places in New Mexico where we find these ideas," Hammer said. "The fund will be that first check, that early capital in the door, and then you pass the baton to Frontier Fund."
The initial $100 million commitment and the recent restructuring came through the SIC's New Mexico private equity program, which takes a portion of state Severance Tax dollars and invests them in venture firms with the promise of those firms making investments into companies in New Mexico.
Chris Cassidy, a member of the SIC who oversees its New Mexico private equity program, said at Roadrunner Venture Studios' Wednesday tech forum the Council is "very proud" to be the "anchor" investor in America's Frontier Fund and, through that, the venture studio.
"The long-term hope is that we would help transform the state into a global leader for frontier technology innovation," Cassidy said. "The reason I was so excited to back Roadrunner is it's helping us to attempt to do exactly this."
