Dundee Venture Capital, an Omaha-based VC firm with offices in St. Louis, Minneapolis and here in Chicago, announced Monday it closed on a more than $25 million round to go toward its goal of fueling early stage tech startups throughout the Midwest.
The 2020 portfolio includes St. Louis-based esports community startup Mission Control, Washington, D.C.-based home maintenance startup Dobby, Minneapolis fishing equipment marketplace Omnia Fishing, and St. Louis sales tech startup Whistle. Two additional companies out of Bloomington, Indiana, and Nashville, Tennessee, are also in the round, but their names were not disclosed.
Although there aren’t any Chicago companies in this most recent round, David Mann, a partner at Dundee who manages its office here, says the VC firm has made more investments in Chicago than in any other city, so it is a major market for fueling innovation throughout the heartland.
“When I think about the cities across the Midwest where what we’re doing is most meaningful, it’s all these kinds of cities, right? It’s where we have offices, for sure — Chicago, Omaha, Minneapolis, St. Louis — but it’s also in all these other cities that need investors like us,” Mann told Built In, citing cities like Austin, Pittsburgh and Indianapolis. “[We want] these companies to grow like we know technology-based businesses here in the Midwest can. Just like their counterparts in the cities and regions with a longer history of venture activity.”
Dundee was founded 2010 by Mark Hasebroock, who was inspired to create something like this based on his own experience as a founder coming up in the early “dot-com” days.
“Mark recognized pretty quickly that it was very difficult for a founder like him to raise money locally — for him, locally was in Omaha,” Mann said. “So the seed was planted for him as a founder very, very early that there was a gap.”
To help fill that gap, Dundee focuses on providing early stage startups throughout the Midwest with seed funding, supplying what Mann refers to as “intelligent capital.” Over the past decade, the firm has made more than 50 investments across 20 cities. Its last funding round was in 2016.
“The idea is not just to write a check and sort of cross our fingers and hope for the best, but to take as active a role as we can, in partnership with the companies that we back, to help them grow through the early stage lifecycle from wherever they are across the broader Midwest,” Mann said.
This support goes beyond leading seed rounds, and also includes taking board seats and working with founders regularly to ensure the company is growing at the clip it needs to to continue to attract additional VC financing.
Dundee mainly focuses on startups in the construction, commerce, transportation and logistics, and financial services industries, all major sectors in the Midwest that have been moved into the spotlight amid the pandemic. Transportation and logistics have never been more important, since personal protective equipment and vaccines have to be shipped around the world. And, these days, e-commerce is the main way folks are getting the goods they need. This means these industries have had to get creative fast, which in turn has led to some interesting technological shifts.
However, Mann says Dundee is looking beyond the trends we’re seeing right now. They’re trying to anticipate what comes after the pandemic.
“It’s almost too late for a seed stage company to invest in [these trends]. The time to invest in remote meeting tools is not now, it was three years ago. The time to invest in last-mile delivery was years ago. Our goal isn’t necessarily to try and find, you know, another DoorDash,” Mann said. “The goal is to keep staying ahead of those curves and find those next trends by identifying the gaps today.”
This news also comes at a time of rapid expansion for the Midwest. Smaller markets like Austin and Denver have been experiencing significant growth, attracting Silicon Valley expats looking for fresh talent and moving to be closer to their customers. And companies in the “Mighty Middle” are getting more VC funding than ever, as reported by Crunchbase.
“Investors have recognized what entrepreneurs have always known — there is a distinct advantage to launching and growing tech companies in the Mighty Middle. The corporations are here, the talent is here, and now the capital is too,” Hasebroock said in a statement provided to Built In. “The companies being launched and funded here today are the ones you will see ringing the opening bell on the stock exchanges before the decade is up.”