New Stack Ventures has reloaded with a new fund to back more startups in Chicago and other markets outside of California and New York.
Chicago-based New Stack announced it has raised $42.6 million for its second fund. It follows the firm's debut $6 million fund in 2018.
Led by founder Nick Moran, New Stack's latest fund aims to back 35 startups, writing checks between $500,000 and $2 million. It has so far deployed about one-third of the capital in the fund, Moran said.
Moran said he believes it's one of the largest funds led by a single partner outside of the coasts. Some of New Stack's prior investments include Valt, which was bought by Dropbox, and Jiobit, which was acquired by Life360. It has also backed Chicago startups like Tovala, TripScout and Hologram.
Moran, who previously worked in M&A for science and tech firm Danaher, began angel investing in 2013. A year later he launched "The Full Ratchet," a venture capital-focused podcast where he interviews investors about the VC industry.
The podcast's growing audience not only helped Moran become better connected and informed about the venture capital space; it also was a way to source deals. Seven of New Stack's investments began with cold emails from founders who were listeners of Moran's podcast, he said, includingTripScout founder Konrad Waliszewski. That outreach led New Stack to invest in the startup's seed round in 2019.
Moran believes Chicago, and the Midwest broadly, is well positioned to continue its momentum as a startup hub as founders now no longer need to be located in Silicon Valley or other traditional tech hot spots.
Founders "have the flexibility to build transformational companies from anywhere," he said. "I don't think there’s ever been a better time to be a founder in Chicago."
