Gateway Capital closed its second venture fund at $25 million earlier this week, the Milwaukee-based firm revealed to TechCrunch. Founded by Dana Guthrie, the fund will focus on Midwest industries ripe for disruption, particularly supply chain and logistics, and manufacturing AI. The first close allows the firm to begin investing immediately. Guthrie, who launched Gateway in 2020, previously raised a $13 million Fund I that same year. Fund II's average check size will range between $500,000 and $600,000, with plans to back at least 20 companies. This regional strategy signals growing venture capital interest in Midwest innovation beyond traditional hubs.

While the exact amount of the first close wasn't disclosed, the $25 million target for Fund II represents a significant commitment to the region. Guthrie emphasized the fund's industry-agnostic approach but highlighted Midwest supply chain and AI manufacturing as key focus areas. The firm's strategy to invest smaller checks ($500k-$600k) could accelerate portfolio company growth in these sectors, potentially creating new regional tech leaders. This move comes as Midwest tech ecosystems gain traction, with increased attention from national investors seeking undervalued opportunities.

Gateway Capital's expansion into Fund II underscores a broader trend of venture firms prioritizing regional innovation hubs. By concentrating on Midwest supply chain and AI manufacturing, the fund positions itself to capitalize on inefficiencies in these industries. The smaller check sizes may also allow for more frequent investments and faster portfolio company scaling. This approach could yield significant returns if the fund identifies and nurtures disruptive startups in these targeted sectors, potentially reshaping Midwest tech landscapes.