THU AM News: Evers announces $100 million investment to boost startup businesses; WisBusiness: the Show with Lena DeLaet, Summerfest Tech

May 30, 2024

— Gov. Tony Evers has announced a $100 million effort to back startup businesses, which he called “the biggest public-private investment in Wisconsin startups and entrepreneurs in our state’s history.”

Evers announced the Wisconsin Investment Fund yesterday at Forward BIOLABS in Madison, a company that offers lab and office space for startups, along with WEDC Secretary and CEO Missy Hughes and officials from five venture capital firms selected for funding.

Evers said the $100 million “is only the beginning” and that he expects the fund to grow significantly.

“As the businesses that receive these investments start to grow, the value of the fund will grow with them, and this will create new opportunities to help even more businesses expand,” Evers said. “In fact, over time, we expect the value of this fund to grow exponentially with a 10-to-one private-public investment ratio.”

The money will be used to invest in companies working in several areas, including technology, health care, agriculture and manufacturing. Hughes praised the investment, saying it will send a message to entrepreneurs that the state will support them.

“The Wisconsin Investment Fund is literally planting a flag in the ground and saying ‘We want to support entrepreneurs who want to start here, who want to grow here, and most importantly, who want to stay here,’” Hughes said.

Cardamom Health CEO Vivek Swaminathan, whose company will be among the first to receive Wisconsin Investment Fund money, said access to capital is critical for startups.

“Oftentimes, we’re trying to make decisions when we can finally afford to make them instead of when it’s really right for our business,” Swaminathan said. “And so we plan to use this kind of capital to hire employees, to improve our solutions and add more, whether it’s product or technology, and to continue to take care of our customers. And if we can do all of that, then we can grow our business and ultimately make a greater impact.”

The venture capital firms will invest at least $1 into startup companies for each dollar of public money they invest. The returns will then be reinvested into the fund to help it grow. The U.S. Treasury’s State Small Business Credit Initiative will provide the $50 million that makes up the state’s portion of the $100 million.

— The largest allocation, $15 million, is going to Madison-based HealthX Ventures, led by veteran entrepreneur Mark Bakken.

Bakken, the firm’s founder and managing partner, launched the VC firm in 2015 and has since grown it to 36 portfolio companies with more than $4.3 billion in market value, according to his Linkedin page. HealthX Ventures is focused on startups driving health care innovation with digital products, with joint headquarters in Madison and San Francisco.

“We are proud to be a part of WEDC’s Wisconsin Investment Fund,” Bakken said in a statement. “Wisconsin has a strong healthcare ecosystem, and this fund will provide great opportunities for health-related startups in Wisconsin seeking to build off of it.”

Committee members for the Wisconsin Investment Fund reviewed applications from 31 fund managers before making their selections, according to a release. Other recipient funds include:

*Venture Investors Health Fund, with $12 million. Based in Madison and Milwaukee, this firm invests in early-stage health care innovations coming out of Midwest research universities such as UW-Madison and the Medical College of Wisconsin. It’s focused on medical devices, therapeutics, digital health, and diagnostics.

Managing Director David Arnstein says the fund’s goal is to “invest in the most promising healthcare investment opportunities in Wisconsin that will have a profound impact on human health.”

*Serra Ventures of Champaign, Ill., with $7 million. This firm invests in early-stage, emerging and growth-stage tech companies in the Midwest region, though Evers’ release specifies the WIF dollars will only be used in Wisconsin. It has launched multiple funds focused on agriculture and food innovation.

CEO and Managing Partner Tim Hoerr highlights the state’s “long and storied history in ag and food,” calling it a perfect fit for the firm’s latest fund, the Serra-Grondex Ag & Food Tech Fund II.

“Our team at Serra looks forward to finding and funding the very best Wisconsin companies in the ag and food sector,” Hoerr said.

*NVNG Investment Advisors, with $6 million. Standing for “nothing ventured, nothing gained,” the firm is co-founded by Carrie Thome and Grady Buchanan and has a presence in Madison and Milwaukee.

“WEDC’s Wisconsin Investment Fund aligns very well with our vision of making Wisconsin’s entrepreneurial ecosystem globally competitive, and we’re looking forward to making meaningful investments in promising startups across the state,” Thome said in a statement.

*Idea Fund of La Crosse, with $5 million. With a focus on pre-revenue and early-stage tech companies across Wisconsin, Minnesota and Iowa, the firm targets software startups and has invested in 15 portfolio companies so far.

Jon Horne, the firm’s managing director, says startup founders in the region can “succeed at the highest levels” with the right resources and opportunities.

“This investment will help us drive more startup growth and success right here in Wisconsin,” he said.

The Wisconsin Economic Development Corp. is currently negotiating with a sixth fund manager for the final $5 million allocation, according to the release.

Listen to a recent podcast with Horne.

— The latest episode of “WisBusiness.com: The Show” features Lena DeLaet, director of sales for Summerfest Tech in Milwaukee.

She discusses the history and impact of Summerfest Tech, and how it connects to Milwaukee’s annual music festival, Summerfest.

“There’s music from all different walks of life, all different genres, and then there’s a ton of stuff to do on the 75-acre park that’s not necessarily even music-related, so it’s really just this huge convening event that has happened in Milwaukee for over 50 years now,” she said.

The free Summerfest Tech conference series, running June 24-27, will include a pitch contest, networking, panel discussions and presentations on a variety of topics including cybersecurity, AI, entrepreneurship, manufacturing and more.

“Just like Summerfest, there’s something for everyone … You’ll see content targeted to executives and leaders, to the technologists themselves — programmers, developers, analysts, engineers — for entrepreneurs, for investors,” she said.

This year’s Summerfest will take place between late June and early July, featuring at least 600 artists across nine days.

Watch the latest episode.

— The UW-Eau Claire chancellor says a recently announced initiative aims to make the Chippewa Valley “the epicenter for testing innovative care models” and technology for rural health care delivery.

The university last week announced the Rural Health Innovation Alliance during a Wisconsin Technology Council luncheon in Eau Claire. The effort is meant to develop a “sandbox” model for innovation, supporting collaboration between health care providers and other partners.

“This is not a quick win solution, although we expect to see some quick progress,” Chancellor Jim Schmidt said during the event. “This is not something we’re going to study for the next several years … you should expect to see tangible things happening within the first six months.”

While the alliance wasn’t created in response to Hospital Sisters Health System network and Prevea shutting down hospitals and clinics in the region, Schmidt said the recent closures emphasize the urgency of improving health care access and quality for rural residents.

“As a related consequence of this project, we have the potential to spur economic development further in the Chippewa Valley,” he said. “We want to positively impact workforce development while attracting and retaining entrepreneurs, focusing on the IT community … software testing, clinical trials, medical device manufacturers, just to name a few.”

Also at the event, Chicago ARC Executive Director Kate Merton noted the region is anchored by UW-Eau Claire’s educational resources as well as health care systems operating in the region, which the alliance can build on as it develops.

“You’ve actually got those right ingredients ready to put together for a long-term plan,” she said. “We do need to deliver stuff near-term, but there is like a long-term opportunity to really make the Chippewa Valley the rural health care epicenter of the U.S.”

Schmidt noted the alliance is a “logical next step” following a 2021 workforce development grant from the Wisconsin Economic Development Corp., which provided $9.4 million to the university.

In a recent column on the effort, he said one of its initial steps will be to create health care “microsites” in local communities, offering services such as urgent care, behavioral health, primary care, pediatrics, oncology and more.

“The small, versatile microsites would feature both in-person and virtual care,” he wrote. “The hybrid approach will utilize cutting-edge technology and delivery models focused on establishing new paradigms for future health care. Ultimately, the alliance hopes those solutions can be scaled across the country and perhaps around the world.”

— The state DOJ now says Wisconsin was the No. 1 state for collecting the most prescription medications during the spring 2024 Drug Take Back, after previously announcing the state collected the second-most drugs.

The Department of Justice release notes the DEA has since corrected its data to show Wisconsin collected the most, with a haul of 55,122 pounds. That’s the same number reported last week for the state.

A DOJ spokesperson previously noted Maine was the No. 1 state for the spring event with more than 93,000 pounds collected, but Wisconsin had been the top state for the past several years for both spring and fall collections. Maine didn’t participate in the 2023 fall collection, according to the spokesperson, possibly leading to the state’s larger initial reported total for the spring.

For more of the most relevant health care news, reports on groundbreaking research in Wisconsin, links to top stories and more, sign up today for the free daily Health Care Report from WisPolitics and WisBusiness.com.

Sign up here.

— Wisconsin banks had a strong start to the year as first-quarter lending increased across all loan categories, the latest federal figures show.

That’s according to an analysis from the Wisconsin Bankers Association, which says the FDIC numbers for the first quarter of 2024 show banks in the state are “in a healthy position.”

Residential real estate loans rose 13.62% year-over-year, as homes are selling quickly amid higher home prices and interest rates, WBA notes. And commercial lending rose 1.94% over the year as “business owners cautiously strive for growth, avoiding significant operational changes.”

Meanwhile, farm loans increased 7.7% over the year.

Rose Oswald Poels, president and CEO of the WBA, says geopolitical issues remain among top economic concerns.

“In addition, decreases in credit quality indicate economic strain and signal challenges for consumers, businesses, and banks if inflation is not tamed,” she said in a statement. “The Fed is unlikely to ease interest rates until the end of 2024 at the earliest; banks stand prepared to help their customers weather headwinds.”

See the release.

Act 10 is back in court. Here are the stakes for Wisconsin unions

Evers issues order to help plan for security during RNC

TOPICS

CONSTRUCTION

– Paul Davis Restoration launches construction division

– Massive Somers housing proposal gets village approval

EDUCATION

– West De Pere’s Bethany Counard named a Wisconsin Teacher of the Year

ENVIRONMENT

– A tornado is confirmed to have hit Door County’s Washington Island on May 21, first in county since 2000

FOOD & BEVERAGE