Earlier this year, Twin Cities entrepreneur and investor Ryan Broshar and partner Natty Zola began sourcing capital for their firm's third venture fund.
Investors saw opportunities for hefty returns from the firm's heavy footprint in the Midwest and Rocky Mountain regions. On Tuesday, Matchstick said it closed the fund with $5 million more than the duo sought.
"The proof has been in the pudding of our investments to date, and some of the amazing founders we've been able to back in our markets," Broshar said. "Our thesis around this fund hasn't changed. It's stayed consistent from fund to fund because it's been working."
Matchstick Ventures, which is operated from Minneapolis and Boulder, Colo., closed on $55 million for its latest fund, its largest ever. The firm is now approaching $100 million in total capital raised since its inception in 2015. Matchstick raised $30 million for its second fund in 2019, and $5 million for its first fund.
Matchstick Ventures has invested in more than 100 companies in the past six years and is the most active venture investor in tech startups in Minnesota, according to New York-based business analytics firm CB Insights.
Portfolio companies from Minnesota include Branch, a Minneapolis financial services technology company that recently raised $48 million from investors; Soona, a Minneapolis on-demand virtual photo studio startup that secured over $10 million from investors in April; and Edina-based software startup Parallax, whose recent $7 million funding round valued the company at $33 million.
"There's a lot of interest in our markets and a lot of great companies coming out of our markets," Broshar said.
In the Midwest, Matchstick's territory also includes Wisconsin, Michigan, Illinois and Indiana. Investments span several industries, and more than half of the fund's existing investments are in companies led by at least one diverse founder, Broshar said.
Through its third fund, Matchstick will write checks between $500,000 and $1.5 million as pre-seed and seed investments into startup companies. Broshar anticipates up to 35 investment deals being funneled through the third fund over the next several years.
Among the investors in Matchstick's fund is Foundry Group, a Colorado-based fund that invests in other venture funds, in addition to individual tech companies. Other investors include state pension plans, Broshar said.