Grand Ventures, the West Michigan venture capital firm investing in early-stage tech startups, has closed its first deal.
The firm contributed an undisclosed amount to Cincinnati-based big data startup Astronomer’s $3.5 million seed round. The funding was led by San Francisco’s Wireframe Ventures and Ohio’s CincyTech; other investors include Frontline Ventures, Drummond Road Capital, CoreNetwork Fund, and M25 Group. Grand Ventures will also take a seat on Astronomer’s board as part of the deal.
Astronomer has developed a data engineering platform that provides its customers, such as Procter & Gamble (NYSE: [[ticker:PG]]), with the infrastructure necessary to analyze information. Astronomer automates the process of accessing, organizing, and managing large amounts of data so it can be mined for business insights.
Maitlin Cramer, a principal at Grand Ventures, compares Astronomer’s technology to the plumbing in a house.
“The pipes behind the walls are where the work is done; however, the homeowner doesn’t worry about what’s going on behind the wall, they just want to turn on the faucet or shower and have running water,” Cramer explained during a phone interview. “Astronomer’s clients don’t worry about wrangling the data, they just distribute access to their aggregated data across the organization so they can focus on leveraging it to drive the business.”
The result, he says, is significantly less time spent on data preparation and routing, allowing Astronomer’s customers to concentrate instead on untapped revenue potential.
“We were excited about Astronomer’s technology because it can be brought into any industry,” Cramer says. “It’s a great business and a great team.”
The 50-person company plans to use the new investment capital to increase its product and engineering teams and expand sales efforts.
Grand Ventures, which was started earlier this year by by McKeel Hagerty of Hagerty Insurance and Huron River Ventures’ Tim Streit, is focused on high-growth tech startups in agriculture, manufacturing, transportation, and other industries with a strong Midwestern presence.
“After looking at more than 400 deals, we’re very bullish on the Midwest,” Cramer says. “There’s a profound shortage of seed and Series A funding here, and I think that’s where we can really play.”
Cramer, who recently bought a house in the same East Grand Rapids neighborhood he grew up in, says that 25 percent of computer science degrees are awarded by Midwestern universities—and not all graduates immediately decamp for the coasts.
“There are a lot of quality entrepreneurs here, and a lot of high-caliber deal flow in the Midwest,” he says, praising Michigan’s entrepreneurs for having grit. “It’s why I packed up and moved back here from California, and it’s great to see our investment thesis succeeding.”
So far, Cramer says, the biggest challenge Grand Ventures has faced has been “educating the market” on the promise of early-stage tech startups, an obstacle particular to the risk-averse Midwest. “It’s a different mentality than Silicon Valley,” he adds.
Grand Ventures expects to announce another investment in July.
