KCRise Fund Closes $34 Million Fund III to Build on Hyper-Local Investment Strategy; Announces First Four Investments from New Fund
KCRise Fund III, Backed by Prestigious Local Institutions, to Invest in 20 More Technology Startups in the Kansas City Region; Continues Thesis of ‘Hyper-Local Focus Brings Competitive Advantages’
June 22, 2023 (Kansas City, MO) — KCRise Fund today announced the closing of its third venture capital fund, adding $34 million of new capital to invest in technology startups in Kansas and western Missouri.
Similar to KCRise Fund I and II, Fund III will continue to build on the firm’s geographically focused thesis—investing in high-growth companies with ties to the Kansas City region.
The closing of Fund III builds on the venture firm's growth since its founding in 2016, scaling to over $90 million in assets under management. The firm has invested in 48 portfolio companies, with ten exits to date—including four acquisitions by public companies. KCRise Fund I, which includes notable exits such as BacklotCars and PayIt, has already returned nearly 100% of capital back to its investors, with half of its portfolio companies still unrealized.
“The number of high-quality technology companies in Kansas City has grown exponentially in recent years thanks, in large part, to a local capital market willing to give them a chance,” said Ed Frindt, Managing Director. “Our prior investors are returning, and we are able to recruit new capital, because local entrepreneurs are delivering financial returns—which creates an important two-sided relationship we tirelessly strive to facilitate.”
On what it means to close the third fund, Frindt shared, “We are excited to have fresh capital at the stage where we’ve identified a need locally and had success, and to continue offering something unique in the venture capital world—giving neighbors the ability to collaborate and win together. We are proud to be Kansas City capital for Kansas City startups.”
KCRise Fund raised Fund III in half the time of the capital raise for its second fund. Investor support and conviction despite the current market conditions further validate KCRise Fund’s approach and performance history, as well as the growth of local investor interest in the asset class.
“Reaching the milestone of our third fund would not have been possible without so many individuals and institutions believing in our vision for the region,” said Darcy Howe, Founding Managing Director. “Our investors continue to have conviction that by empowering founders with capital and support, globally relevant technologies can be built in our city.”
KCRise Fund III investors include a diverse cross-section of successful entrepreneurs, prominent family offices, and prestigious institutions, including:
endowments such as Health Forward Foundation and Research Foundation;
institutions of higher education such as Kansas City University, University of Central Missouri, and University of Kansas Medical Center;
financial institutions such as Academy Bank, Bank of America, and Country Club Bank;
corporate leaders such as Burns & McDonnell, Evergy Ventures, Foley Equipment, GBA, JE Dunn, Lockton, and MarkOne Electric; and
government entities such as the State of Kansas (via GROWKS Multi-Fund Program).
The new fund allows KCRise Fund to continue bridging the gap between promising technology entrepreneurs and strategic high-growth capital. Additionally, by doubling down on prior investment strategies and themes, it underscores KCRise Fund’s thesis that the untapped potential of Kansas City—as an underserved startup ecosystem—is ripe for investment.
“It is imperative for the entrepreneurial ecosystem and the high-growth startups in Kansas to have access to capital to build their companies,” said Trish Brasted, President of Entrepreneurial Growth Ventures, which manages, via the GROWKS Multi-Fund Program, the State of Kansas’s investments in funds and companies related to the federal State Small Business Credit Initiative. “And it is equally as important that we partner and invest alongside those that have demonstrated success and support for the entrepreneurs and founders in our region, which made the team at KCRise Fund an obvious first choice for our newly created GROWKS Multi-Fund Program.”
“Bank of America’s investment in KCRise Fund is part of our ongoing commitment to advance economic equality as well as elevate and support to minority- and women-owned funds,” said Matt Linski, President, Bank of America Kansas City. “We want to facilitate more opportunities for entrepreneurs and address the challenges they face, especially when it comes to securing funds to start or grow their business.”
With four investments already out of KCRise Fund III, the initial portfolio companies in the new investment vehicle represent innovative opportunities to advance industries in which the Kansas City region has evidenced institutional expertise and pools of talent:
Celerity Enterprises is improving coordination across special purchasing agreements for industrial manufacturers, suppliers, and distributors;
Saile.ai is deploying AI that automates all sales prospecting;
PLOT is advancing the built environment through improved coordination on construction jobsites; and
Outbound AI is increasing the productivity of administrative personnel for healthcare providers.
“Our investment dollars naturally follow where the local talent is gravitating, because we are so close to the market,” explained Frindt. “It’s becoming more mainstream in our region to work in technology, where you have fast growing companies in attractive sectors that are solving meaningful problems and offering high-paying roles and employee ownership.”
Howe continued, “In 2016 when we began to test the thesis that hyper-local focus on high potential technology startups could bring competitive financial returns, we weren’t sure if deal flow, talent, and investors could get to scale to make it successful. However, in seven years, we are proud of the catalytic results, as evidenced by talent coming from around the country, competitive financial returns, and deeply engaged investors. My partners Ed Frindt and Liam Reilly deserve the lion’s share credit for the present and future success of KCRise Fund.”
ABOUT KCRISE FUND
KCRise Fund is a venture capital firm focused on investing in early-stage technology companies with a strategic connection to the Kansas City region. The firm manages over $90 million in investor capital and has invested in 48 companies with ten exits to date, including BacklotCars, PayIt, Spear Power Systems, Zego, and Dynamhex. The firm’s Board of Directors includes technology veterans Adam Blake, Ron LeMay and Ashwin Shashindranath. For more information, please visit KCRise Fund and follow on Twitter and LinkedIn.
KCRise Fund Media Contact:
Darcy Howe and Ed Frindt, Managing Partners of KCRise Fund
Ed Frindt, Darcy Howe, and Liam Reilly of KCRise Fund