Rock River Capital Nabs Another $15M to Invest in Midwest Startups

A young Wisconsin venture capital firm says it has raised more than $15 million for a fund created under a program partially supported by the state of Wisconsin and aimed at increasing the amount of funding available to Badger State startups.

Rock River Capital Partners said in a document filed with the SEC on Friday that the amount raised for the firm’s debut fund, which it originally disclosed to securities regulators in early 2017, has increased to $21.2 million, from $6 million. The money came from 68 investors, according to the document. Madison, WI-based Rock River might raise an additional $8.8 million for the fund, the document indicates.

The firm is part of the Badger Fund of Funds, a program that was created to help pump more venture capital into early-stage businesses based in Wisconsin. The program is structured to have a combination of public and private dollars flow into the central Badger Fund and, further downstream, recipient funds like Rock River.

According to the proposal for the program submitted to the state in 2014, both the Badger Fund (which won’t make direct investments in startups) and the recipient funds (which will) must raise private capital to complement the taxpayer money provided to them.

The state of Wisconsin has committed $25 million to the Badger Fund of Funds program. So far, the initiative has backed the launch of five recipient funds.

The other four recipient funds are: Idea Fund of La Crosse, which has raised $13 million; Winnebago Seed Fund, which is based in Neenah, WI, and has raised $11 million; Milwaukee-based Bold Coast Capital, which said last month it will receive up to $6 million from the central Badger Fund; and Madison-based Winnow Fund, which seeks to support startups formed on college campuses. Investors have reportedly committed to invest $4 million in Winnow, the newest of the five recipient funds.

The two partners at Rock River are Andy Walker and Christopher Eckstrom. Both are graduates of the University of Wisconsin-Madison who returned to the state from Chicago to start the firm.

Rock River says on its website that it will consider backing early-stage companies from any industry. However, the firm says it’s likely to gravitate toward startups that sell goods and services that are software-related in some fashion, and “more often than not, include a data analytics component.”

Rock River prefers to lead funding rounds, and the typical amount it will contribute to a deal is between $500,000 and $1 million, according to the firm’s website. Rock River says it will set aside up to half of the money it raises to provide follow-on financing to companies it has invested in previously.

The Wisconsin-based startups that have raised funding rounds led by Badger Fund of Funds-connected entities include Sift Medical Data and American Provenance, both of which are backed by Winnebago Seed Fund. Another is Curate Solutions, which Idea Fund of La Crosse led a $450,000 investment in earlier this year.

Jeff Buchanan is the editor of Xconomy Seattle. Email: jbuchanan@xconomy.com Follow @_jeffbuchanan

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