Brightstone targets $50M for third venture capital fund

Brightstone Venture Capital, an early-stage investment firm in Minneapolis, is targeting $50 million for its third fund, one that will be used to invest in technology and life science-based companies in Minnesota and across the U.S.

The firm has raised an initial $24.5 million for the latest fund, which includes backing from its largest existing limited partner investors, said David Dalvey, managing general partner of Brightstone.

The firm raised about $20 million and roughly $30 million, respectively, for its two previous funds, Dalvey said.

"Our first two funds have been very successful and produced some extraordinarily valuable companies," Dalvey said. "Over the past eight years, we have made a total of 30 investments and only two of those investments have been written off, representing only 3 percent of total dollars invested, which is extraordinary in an industry where an average 55 percent of assets are typically written off by venture funds."

Brightstone typically invests between $1 million and $5 million into startup companies.

Some of the firm's past investments included Bite Squad, the Minneapolis food delivery business that was acquired by Waitr Holdings in 2019 for $323 million; real estate tech platform HomeSpotter, which in May was acquired by Lone Wolf Technologies; and Flipgrid, a Minneapolis video-sharing platform for students and educators that was acquired by Microsoft Corp. in 2018.

Of the firm's 30 current investments, 14 are based in the Twin Cities, including Miromatrix Medical, Vyant Bio, Cryosa, Aria CV and Gravie, Dalvey said.

Under the life sciences category, the firm has invested in companies focused in medical devices, particularly for cardiology, orthopedics and neurology, in addition to companies developing stem cell therapies and cancer diagnostics and therapies. Under technology, the firm is interested in enterprise cloud storage, semiconductors and enterprise software companies.

Investments in companies outside of Minnesota include Boston-based Wasabi Technologies, an enterprise cloud-storage provider that after its latest equity round is valued at $725 million.