Catalyst Fund approves $2 million for ABQid
Matching funds could mean $5M in fresh investment capital
The state-backed Catalyst Fund has approved up to a $2 million investment in the ABQid business accelerator to provide funding for local startup companies. ABQid must match Catalyst funding dollar-for-dollar to receive the full amount, but if all money raised by the accelerator is included, it could mean up to $5 million in fresh money could soon become available for new companies emerging from the accelerator, said ABQid Executive Director T.J. Cook.
To date, ABQid has invested about $1.3 million from private partners in 30 startups that have graduated from the program, which launched in 2014. With the new Catalyst money, the accelerator can now commit a lot more funding to its graduates.
“As a seed fund, this gives us more room for the next three years to invest in all startups in our programs,” Cook said. “We have a runway now to be more aggressive in our funding to give more bite to our efforts.”
Graduates that already received funding have used it to leverage another $2.7 million from other investors, meaning nearly a three-times multiplier effect from ABQid investments, Cook said.
“That’s good, but we want to grow that a lot more, to like a 10-times multiplier effect,” he said. “The Catalyst backing will help with that.”
The state Economic Development Department announced the new Catalyst investment Wednesday afternoon.
“The Catalyst Fund leverages private investment for our homegrown startups, which helps move our state forward as we continue to build a healthier economy,” said Economic Development Secretary Matt Geisel in a prepared statement. “By adding another partner in ABQid, we strengthen our commitment to the success of homegrown New Mexico companies and hardworking New Mexico entrepreneurs.”
The state launched the Catalyst Fund last year with $10 million from the State Investment Council and $5 million each from the U.S. Treasury Department and private investors. The fund, managed by Sun Mountain Capital in Santa Fe, will provide up to $20 million in contributions to eight to ten venture funds over the next couple of years, generating a total of at least $40 million for startups around the state after counting matching funds.
A total of $6.65 million in Catalyst funding has now been committed to four entities, including $2.8 million for Cottonwood Technology, $1.35 million for Tramway Venture Partners, $800,000 for New Mexico State University’s Arrowhead Innovation Fund, and the new $2 million for ABQid.
“ABQid greatly appreciates this investment, which shows the confidence Sun Mountain Capital has in our process to identify and develop startups that have the potential to become successful New Mexico companies,” Cook said. “We couldn’t be more pleased.”