Venture capital firm Rally Ventures, which has locations in Minneapolis and Menlo Park, California, has closed on a new, $240 million fund that will invest in early-stage startups.
Fund V is especially focused toward companies in the fields of artificial intelligence and machine learning, cybersecurity, fintech and software-as-a-service. Rally Director of Platform Rachel Stone Subasic noted that the firm believes in the Midwest and has generated nearly $5 billion in exit value for Midwest software companies, creating about 5,000 jobs in the process.
“Rally Fund V will actively seek out companies that are driving innovation in embedded payments, insurance, lending, payroll, treasury management, spend management, funds distribution and every other part of the historically stand alone financial services stack,” Rally Ventures managing director Justin Kaufenberg said in a press release.
Since Rally was funded in 2012, it has invested in 76 companies and has had 19 successful exits, including three initial public offerings. Some of Rally’s notable investments from previous funds include Arctic Wolf, Bugcrowd, Harness, UiPath, Total Expert, Braze, Carbon Black, Coupa, SportsEngine, Twistlock and Verodin.
The firm closed on its fourth fund, which was $250 million, in December 2020. At that time, Rally said it had nearly $600 million in committed capital.
Rally Ventures has led multiple fundraising rounds for Minneapolis-based substance abuse recovery platform Kyros, including a $4.4 million round last year and a $10.5 million round in September. Rally recently invested in Edina-based hiring and onboarding startup Yardstik.
The VC firm also recently hired former Google Chief Information Officer Ben Fried, who strengthens the team’s expertise in engineering leadership, cybersecurity and AI/ML. Fried has a long history with Rally; for years he's been part of the firm's network of founders and executives who act as its informal advisers.
Rally co-founder and Managing Director Jeff Hinck said Fried, who was also the site leader for Google's New York office," will be a tremendous asset for Rally and our portfolio in discerning what will have a lasting impact vs what is just hype.”
