Great North Ventures, a venture fund that invests in early-stage startups, has closed on its second venture fund.
The $40 million Fund II will prioritize investments in three key themes: digital transformation through AI, community-driven applications and solving labor problems.
The firm’s Fund II investments already include Golden Valley-based Omnia Fishing, Edina-based Yardstik and Minneapolis-based NextGem.
Prioritizing its investments is a shift for the St. Cloud-based firm. Its first fund, worth $23.7 million, took an industry-agnostic approach to its deals.
Rob Weber, Great North’s managing partner and co-founder, said the decision to identify an investment strategy came from what the firm learned in the first fund.
“We didn't ever want to put a stake in the ground and say, ‘This is exactly what we're gonna do,’ because we wanted to be flexible and opportunistic,” Weber said. “But then we ended up finding we kept investing in these three themes.”
Although Fund II is 70% bigger than Fund I, Weber said that doesn’t necessarily mean the firm will be writing bigger first checks. “What this bigger fund allows us to do is to dedicate a lot more funding for follow up,” he said.
Weber added the ability to maintain a long-term partnership with portfolio companies could become a strategic advantage as later-stage venture capital funding slows down.
“I think with a larger fund, heading into this kind of economic climate, we will be a really desirable fund to partner with,” Weber said. “Whereas there are a bunch of smaller seed funds that are going to write one check and are done.”
Great North Ventures is led by twin brothers Rob and Ryan Weber and Pradip Madan, who's based in Silicon Valley.
Great North’s first fund now includes a portfolio of 27 investments including Bloomington-based Dispatch, Minneapolis-based Branch and Chicago-based FactoryFix.
