Michigan’s Grand Ventures announces $50M early-stage fund

Grand Ventures today announced its second fund to invest in early-stage companies. The Grand Rapids, Michigan firm tells TechCrunch that it aims to lead seed-stage investments in startups solving problems facing the fintech, DevOps and supply chain sectors.

The $50 million Fund II is managed by general partners Tim Streit, Camila Noordeloos and Nathan Owen. This new fund brings the total amount of assets under management to $80 million. Streit says he’s thrilled to sign on new limited partners interested in venture capital firms and tech companies based outside of Silicon Valley.

With a keen focus on supporting entrepreneurs in their nascent stages, Grand Ventures is poised to play a pivotal role in shaping the landscape of emerging industries, particularly throughout the Midwest, central Canada and beyond. The $50 million Fund II received significant support from the firm’s existing investor base.

Streit smiles as he explains a good founder fit for Grand Ventures. He’s from Michigan and thinks his Midwest roots play a role in the types of founders who work best with Grand Ventures. He likes working with scrappy founders who can get their hands dirty and have multidisciplinary skill sets. He says two-person founding teams are ideal, and he wants someone with domain expertise and enough technical aptitude to build on their own.

He’s interested in embedded finance right now, saying it’s a compelling intersection of vertical SaaS and embedded payments. And these sorts of companies are popping up everywhere.

“There are great founders all across the country developing vertical SaaS solutions laying fintech into those opportunities,” Streit said. “You might have a great operator that’s based out of Tulsa or Ohio where they built software for their operations. And now they realize they want to offer B2B vendor payments, and they want to work with capital solutions.”

He’s bullish on building great tech companies outside of San Francisco’s Bay Area, in part from the success of past investments. Grand Venture’s first fund saw some timely investments, including TealBook, out of Toronto; InvestNext, out of Detroit; Chain.io, out of Philadelphia; and Astronomer, based in Cincinnati.

“We were an early investor in Astronomer,” he said. “This was in the early days of big data, and Astronomer was a pioneer and happened to be based in Cincinnati… They realized that someone has to build an enterprise-grade version of Apache Airflow — to build that company from humble roots in Cincinnati is super cool. And if you look at the co-investors, it’s the who’s who of venture capital.”

The firm already deployed some of the capital in Fund II, investing in iink Payments, Payload CMS and Terminal 49.