Venture fund reaches milestone, makes first investment
By Jeff Karoub , Michigan News
The Accelerate Blue Fund, a University of Michigan early-stage venture fund raised through philanthropy, has reached its first fundraising milestone and made its first investment in a U-M tech startup.
The recipient of the fund’s first investment is Movellus Inc., which provides technology to boost semiconductor chip design for cloud computing, artificial intelligence and other applications. Movellus, based in San Jose, California, with operations in Ann Arbor, launched in 2016 with help from U-M’s Office of Technology Transfer.
Accelerate Blue has made an initial investment of $150,000 in Movellus as part of a $3 million bridge round.
The evergreen fund, which was officially approved to raise at least $20 million by the Board of Regents in October 2019, reached its initial fundraising goal of $2 million in early 2021. That puts it in the position to start making investments of between $10,000 and $200,000 in U-M tech startups.
Accelerate Blue aims to support the attraction of business leadership, speed U-M tech startups to commercial success, and shorten the gap to securing additional venture capital by providing early risk-tolerant investments and leveraging the resources of U-M and the Office of Innovation Partnerships. All investment returns will go back into the fund for future investments in new U-M startups.
In 2019, Movellus secured $6 million in Series A venture funding, which was led by Stata Venture Partners, run by Ray Stata, founder and chairman of Analog Devices. Also participating in the round were Intel Capital, which had invested in two prior funding rounds, and U-M’s MINTS, or Michigan Invests in New Technology Startups.
“The fund’s first investment in Movellus is a significant milestone for Accelerate Blue. We are excited to be backing Mo Fasil, founder and CEO, and his team as they grow the company and successfully commercialize the discoveries of professor David Wentzloff, which Movellus licensed from U-M in 2016,” said Mike Psarouthakis, director of U-M’s Innovation Partnerships Venture Center and managing director of the Accelerate Blue Fund.
“While Accelerate Blue’s primary investment focus is on new startups, the Movellus investment fits into the 20 percent of the fund targeted to invest in later-stage U-M startups that are potentially faster liquidity events. This 20 percent is a long-term strategy to grow the fund’s pool of investment capital while we continue our efforts to raise additional investment capital from donors.”
Accelerate Blue has a goal of raising at least $20 million. Innovation Partnerships officials have said they initially thought fundraising efforts would be curtailed by their inability to travel and hold in-person meetings during the pandemic, but they kept making progress through productive video conferences with U-M alumni, tech entrepreneurs and U-M supporters across the United States.
Coming off a record year for invention disclosures and startups launched, the pace of innovation continues at U-M, with 361 new invention reports and 17 startups launched so far in fiscal year 2021.
Innovation Partnerships is a unit within the Office of the Vice President for Research.
“There is a wealth of innovative research taking place across the University of Michigan, and I am confident the Accelerate Blue Fund will play a critical role in ensuring that society can benefit from this important work by strengthening our entrepreneurial ecosystem and supporting the expansion of our startup companies,” said Rebecca Cunningham, vice president for research and the William G. Barsan Collegiate Professor of Emergency Medicine.
Wentzloff is a member of the Movellus board of directors, with equity, and U-M has a financial stake in Movellus.