A newly rebranded Cincinnati-based venture fund has received a multimillion-dollar windfall from the state, and the monies will be used to stand up more early-stage startups in the region. It’s one of three local firms to receive the maximum allocation announced Tuesday.
Cintrifuse Capital, the investment arm of Over-the-Rhine-based startup catalyst Cintrifuse, has been awarded a $10 million State Small Business Credit Initiative (SSBCI) matching loan from the Ohio Department of Development, which will support the creation of a new $20 million fund. The firm plans to, in turn, invest in and scale early-stage companies in the region.
Locally, CincyTech and H Venture Partners were also awarded $10 million each. CincyTech, an Avondale-based seed-stage investor, is in the midst of raising a $100 million Fund VI, its largest to date, while H Venture, launched in 2017 by Elizabeth Edwards, is raising a $20 million second fund.
J.B. Kropp, Cintrifuse CEO and managing director of Cintrifuse Capital, called the award a game-changer for startups in the region.
The new fund, he said, is in addition to Cintrifuse Capital’s current fund, Fund III, which invests in local seed and Series A startups as well as national venture capital funds. Fund III launched late last year and represents a transformational change for the organization. In the past, it has distributed funds to other venture groups throughout the United States.
“These (SSBCI) funds will allow us to provide much-needed capital at the earliest stages of venture building and enable us to deliver more targeted support to founders who have the potential to build transformational businesses,” Kropp said in a news release. “This fund will play a critical role … at a time when it is historically difficult to raise capital.”
The programs are part of the federally funded SSBCI venture capital program. Ohio Gov. Mike DeWine, Lt. Gov. Jon Husted and Ohio Department of Development Director Lydia Mihalik on April 30 announced $86 million in awards.
In total, 11 applicants received funds through the Ohio Venture Fund and Ohio Early Stage Focus Fund, and the dollars will be used to invest in companies focused on health care, manufacturing, food technologies and more, the state said.
“These awards will help spur innovation by fostering a diverse entrepreneurial ecosystem and accelerating the growth of high-potential companies,” Mihalik said in a news release. “By directing these funds to historically under-represented founders and tech-focused companies, we’re leveling the playing field and ensuring everyone has a chance to succeed in the heart of innovation.”
All three Cincinnati groups were awarded from the Ohio Venture Fund. The firms were eligible to apply for $5 million to $10 million amounts. Those totals require a match that would result in total funds of at least $10 million to $20 million.
Cintrifuse Capital will manage the new $20 million fund and invest directly in pre-seed and seed-stage startups based in Southwest Ohio. The startups that receive investment will also benefit from targeted programming and resources through a cohort-based program to help them scale and fundraise in the future, the organization said.
Since its launch in October 2023, Cintrifuse Capital has invested $4.75 million in 12 local companies out of Fund III, attracting more than $33 million in outside capital, according to Executive Director Nikki Boehmker. Its portfolio includes companies like Soundtrace and Cloverleaf, among others.
Cintrifuse Capital plans to deploy another $70 million to $100 million locally, including the SSBCI funds, over the next five to seven years.
H Venture Partners, meanwhile, was awarded $10 million for its H Venture Partners Brand Fund II to invest at the earliest stages in life sciences, therapeutics, advanced materials and food technologies.
CincyTech, under its Cincinnati Cornerstone Capital LLC, was awarded $10 million for its Fund VI to invest in health care and digital technology companies. Most of the fund’s investments will be in Southwest Ohio, but the fund may also invest in companies elsewhere in Ohio. Health care investments will be in the areas of therapeutics, medical devices and digital health technologies that improve patient care. Digital technology investments will include enterprise infrastructure software, business process automation software, tech-enabled managed services and digital services companies.
Emma Off, who took over as CEO of CincyTech in January, said applicants had to have matching funds already committed. Those were in addition to the $12.3 million CincyTech raised as part of its first close on the $100 million Fund VI.
Off said the firm is going to use the award to catalyze additional investment into the new fund.
“This is huge for the region,” Off told me. “For CincyTech, the state’s award validates the work we’re doing in the region to drive venture development and innovation growth.”
