Pre-seed investment firm Groove Capital has launched its second fund, totaling $15 million.
Not yet closed, the new fund will begin making investments into early-stage companies starting the first quarter of 2023, Reed Robinson, founder and partner of Groove Capital, said in an interview. Along with the fund announcement, Mickayla Rosard, who has served as the head of platform for Groove since last year and leads the firm's angel-investing network, has joined Robinson as a partner at the firm.
Similar to its first fund, which launched in 2021 at $7.5 million, Groove's second fund will also aim to provide capital to about 50 companies, Robinson said. The investments will be made over the course of three years at a rate of two to four deals typically per month. The partners will target investments of $250,000 with the new fund. They are not looking at certain industries, but rather startups that will “produce venture returns,” Robinson said.
He declined to disclose the names of those who invested in the fund at the time.
Ninety-percent of the funds Groove has invested so far have been in Minnesota-based companies – a trend that the firm plans to continue with the new fund, Robinson said. So far, Groove has invested in a total of 48 companies, Robinson said.
Groove’s current portfolio includes companies like St. Paul-based Agitated Solutions, Eden Prairie’s Itiliti Health and Arden Hills-based Maazah.
Bringing on Rosard as a partner is an "acknowledgement" of her work and her role in helping build Groove's angel-investing network side of the company, Robinson said. "We continue to not just desire to support the founders we're investing in but also to continue to build a really thriving community of early-stage investors, so her work and her focus continues," he said.
And with women making up just 15 percent of general partners at venture capital firms, according to 2021 PitchBook data reported by the New York Times, Groove bringing on Rosard as a partner is a "milestone," she said in an interview.
While it was a result of the shared goals and values between her and Robinson, Rosard's new role was also a "natural segue to the progression of the work we were doing," including building up an inclusive angel investor community in Minnesota, she said.
"You've got to practice what you preach," Rosard said.