Traction Capital, a Minnesota-based venture capital and growth equity firm, announced the launch of Fund II. This is the firm’s second investment fund focused on scaling early-stage businesses in Minnesota and neighboring states.
Since launching in March, Fund II has raised over $30 million in subscriptions, with a target of $40 million to $60 million. The fund has already invested in two local companies: Blank Metal (helps enterprises integrate advanced AI technologies to drive real business outcomes) and PARQA (a consulting and implementation firm assisting staffing and recruiting firms in modernization and growth).
Building on the first fund, Traction Capital will continue to invest in and buy high-potential businesses. And Fund II will target Midwest companies with strong growth potential, scalable models, and committed leadership.
Traction Capital also utilizes its large network of investors, over 80% of whom are small business owners, to provide resources and expertise across industries.
To support the growth of Fund II, Traction Capital welcomed Matt Meents as a Strategic Growth Partner. As Co-Founder & CEO of Magnet360, he grew the company to $50 million in annual revenue before its acquisition in 2016. And he later co-founded Yardstik, where he drove growth before transitioning to a board role. At Traction Capital, Meents will guide founders through growth challenges and scaling opportunities.
Traction Capital’s first fund had invested in 13 companies and completed two acquisitions, enabling them to reach significant milestones. Kwikly was named Minnesota’s fastest-growing private company in 2024. GoRout saw a dramatic expansion in growth and product offerings, while also TroutRoutes achieved an exit through its sale to onX. Plus, Traction Capital facilitated additional capital raises for five portfolio companies, securing further funding for their growth.
KEY QUOTE:
“We’re excited to launch Fund II and continue our support of outstanding founders. As entrepreneurs, we know how tough scaling a business can be. That’s why we don’t just invest; we offer hands-on experience to help our portfolio companies grow. The success of our first fund proved that when you combine capital with the right strategy, expertise, and a solid framework like EOS®, big things happen. With Fund II, we’re doubling down on our commitment to fueling Midwest businesses.”
Shane Erickson, Managing Partner at Traction Capital
