Minneapolis' Bread & Butter Ventures raises $27M for third fund

Bread & Butter Ventures, a Minneapolis early-stage venture fund, has raised $27 million for its third fund, the firm's managing partners announced Tuesday.

The firm also announced Tuesday the launch of the Bread & Butter Innovation Circle, a group of 16 Fortune 500 companies based in the Twin Cities that will work with the firm to engage with innovative startup companies. Companies belonging to that group include 3M Co., Hormel, Allianz, C.H. Robinson, General Mills, U.S. Bank, Ecolab and Xcel Energy.

Through their third fund, the partners anticipate closing on at least 25 investment deals through checks starting at $300,000 apiece, managing partner Mary Grove said. From the fund, Bread & Butter will continue to make investments in companies that are located across the globe, are focused on food innovation, health technology and enterprise software, and that are raising about $3 million or less from private investors, Grove said.

Investors backing Bread & Butter's third fund include Toyota Ventures, Revolution Ventures, Stella Ventures, St. Paul's F.R. Bigelow Foundation and Minnesota family-owned distribution company Bernick's, along with other individual investors, according to a news release from the firm.

Bread & Butter launched in 2020 and already has a portfolio of close to 50 companies, a quarter of them Minnesota-based companies. Within the firm's first two funds, nearly half the portfolio companies are led by female founders and 63% of the companies include a founder who is a person of color, per the announcement.

Some of the fund's existing investments include Twin Cities companies Upsie, Structural, Civic Eagle, Local Crate, Omnia Fishing, Extempore and Bizzy Coffee.

"We're investing in the core of bread and butter sectors of the modern economy moving forward, addressing how we feed ourselves, care for one another, and what the future of work looks like," Grove said in a statement.

Bread & Butter Ventures was formed by Grove, a former Google executive, and Brett Brohl, an investor and entrepreneur who has been directing the Cargill and Ecolab-backed Techstars Farm to Fork Accelerator from St. Paul.

The two decided to form a new fund that would merge with Brohl's previous Syndicate Fund and its portfolio investments. Bread & Butter raised $8 million for its second fund, and $1.5 million for its first fund.

Seeing a need for clearer pathways for corporations to engage with startups, the Bread & Butter Innovation Circle is designed to create a bridge between those two groups, making introductions between parties that could lead to investment deals or acquisitions, Grove said. The design aims to create a pipeline in Minneapolis where companies are founded, receive investment and successfully exit through acquisition, she said.

Its existence could also lead to co-investment opportunities with Bread & Butter into startup companies, or corporate venture funds becoming limited partners in Bread & Butter Venture funds, Grove said.