$100M Wisconsin Investment Fund will focus on tech, biohealth start ups

As the leader of a health startup, Vivek Swaminathan knows access to capital is critical. 

Swaminathan leads Cardamom Health, a Madison-based firm that specializes in data analytics and improving health care outcomes. 

“Oftentimes we’re trying to make decisions when we can finally afford to make them instead of when it’s really right for our business,” he said. 

Cardamom Health will be one of the first firms to receive money from the Wisconsin Investment Fund, a public-private initiative launched Wednesday in Madison. 

“We’re using this money to help grow our team, to add folks not only who are experts in their field or in the technology, but also folks who may not have the ability to get into healthcare IT otherwise,” he said. 

The Wisconsin Investment Fund will start with $50 million from the federal government through the State Small Business Credit Initiative, which was reauthorized and expanded under President Joe Biden’s American Rescue Plan Act. Venture capital firms will provide $50 million in matching funds.  

“Wisconsin has always been a state where our ideas, innovations, and inventions have driven our state forward,” Gov. Tony Evers said at an event at Forward BIOLABS in Madison, a nonprofit that helps launch startup companies. 

Evers said the fund will be the biggest investment in startups in the state’s history. 

“Whether it’s advances in agriculture, healthcare, science and technology or manufacturing, Wisconsin leads the way,” Evers said. “And we’re making smart long-term investments to ensure Wisconsin will always be one step ahead of the competition.” 

Five venture capital firms will administer the first round of fund investments. Wisconsin Economic Development Corporation CEO Missy Hughes said a sixth capital management firm will be announced shortly. 

“The Wisconsin Investment Fund is literally planting a flag in the ground and saying, we wanna support entrepreneurs who want to start here, who want to grow here, and most importantly, who want to stay here,” Hughes said. 

The fund will invest in companies working in technology, healthcare, agriculture, manufacturing, and other areas, according to a release from the governor’s office. A particular focus will be biohealth, with at least $27 million of the state’s initial investment allocated to that sector. 

Last year, the U.S. Economic Development Administration designated Wisconsin as a regional tech hub for personalized medicine and biohealth technology, which opens the door to up to $75 million in new federal funding to help accelerate research and development of new treatments.

The venture capital firms must match each dollar of public funds with at least one dollar of private money, which will initially double the state’s investment. The WEDC anticipates creating at least a $500 million impact during the first few years of the fund, as the companies selected by the fund continue to grow.

“Over time, we expect the value of this fund to grow exponentially with a 10-to-one private public investment ratio to all the state’s investment partners involved with this fund,” Evers said.

The private partners were selected through a competitive bidding process that saw applications from 31 fund managers. The federal government requires the fund to target “significant support for diverse businesses and companies located in underserved areas of investment,” according to the WEDC. 

The five private equity firms and their investment amounts announced Wednesday are: HealthX Ventures in Madison, $15 million; Venture Investors Health Fund, based in Madison and Milwaukee, $12 million; Serra Ventures, based in Champaign, Illinois, $7 million; NVND Investment Advisors based in Madison and Milwaukee, $6 million, and the Idea Fund of La Crosse, $5 million.

WEDC funds will only be used in Wisconsin.