2024-04-22 22:47:50
BISMARCK – It’s been nearly a year since North Dakota’s Wonder Fund announced any investments, but the program has been anything but dormant since last May when the energy and utility asset maintenance technology began
Thread has been named as only the second ever recipient of the fund’s support
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On Monday, April 22, the North Dakota Department of Commerce announced the Wonder Fund’s latest investment round totaling an additional $3.75 million across three companies, including a major follow-on investment in Thread of $2.5 million, bringing the Wonder Fund’s total investment bring in the Grand. Forks-based company to $5 million.
The Wonder Fund is a $45 million coffer awarded to North Dakota by the US Treasury Department’s State Small Business Credit Initiative (SSBCI). It is led by O’Leary Ventures (OLV), a private equity firm founded by renowned investor Kevin O’Leary.
OLV CEO Paul Palandjian says the targets of the investments are early-stage companies that are either North Dakota-based or established, or that promise to provide critical programs, services and impact in the state.
In addition to Thread, two other companies were included in the most recent round of Wonderfonds investments.
Tavolo, a Minneapolis-based, AI-powered marketing platform for restaurants founded by Fargo native Taranvir Johal, received a $250,000 investment, and $1 million was invested in Drut, a tech firm outside of Boston. Drut has identified North Dakota as a prime region for its AI data center solutions, which focus on decentralizing storage and data centers to create efficiencies for companies.
The SSBCI grant is being awarded to the state in three parts of $15 million, according to Palandjian. While only half of the first investment tranches have been made public by the Wonderfonds so far, there have been additional investments that the state has not officially announced.
In March, livestock management technology firm HerdDogg announced that it had received an investment from the Wonderfonds following a funding round.
“We are proud to invest in HerdDogg as it expands in North Dakota,” O’Leary said in a company release. “The company will bring technology and other high-value jobs to the state while assisting cattle producers worldwide to reduce operating costs and increase profitability.”
Palandjian told The Forum that the first year plus leading the Wonder Fund’s efforts to create economic impact for North Dakota has been “a thrill.”
He said he spent more than 60 days in North Dakota in 2023 securing Wonderfund investments and that the OLV team was able to combat and dispel some early misperceptions regarding North Dakota within the larger investment community. overcome, thanks in part to the staff of the state’s Department of Commerce. .
“I have seen how commerce departments in other states function more like an emblem for the state, but not actually a working department. These guys in North Dakota, they’re rolling up their sleeves, they’re working, they’re trying to help companies in ways that I just haven’t seen. And so we try to integrate that kind of ethics into how we think regarding the investment,” he said.
Palandjian said Wonder Fund will have a portfolio of regarding 20 companies once the full $45 million is invested.
“Four to six of them that might be in the $500,000 to $1 million range — the smaller, earlier-stage companies that we come in when some of the other seed investors are from the ecosystem,” he said. “And then we’re going to have some larger anchor investments that are more advanced and have compelling economic underpinnings for which we think the returns are pretty good.”
Palanjian said Thread is a good example of the latter category and of how the Wonder Fund not only invests in the companies, but also continues to act as a support system and champion, using OLV’s connections to bring it to larger introducing audiences.
“Our network is not just a national network — it’s also international because Kevin (O’Leary) is a respected global name,” Palanjian said. “Thread has many potential customers in its roadmap that come from oil and gas nations, so based on our ability to access leadership in European and Middle Eastern countries, we will be able to drive the adoption of Thread’s technology at end users in those countries.”
Thread’s software is intended to help energy and utility companies efficiently track, inspect and protect their physical infrastructure and assets through data and automation. Otter Tail Power is a Thread customer that uses the technology to make wind turbine inspections more cost-effective and extend the life of its turbine blades.
The range of Wonderfonds investments so far has been $250,000 to $5 million, but Palandjian said the “sweet spot” is regarding $2.5 million.
“At the rate we’re going, there’s a scenario where (the full $45 million) is fully invested by mid-2025,” Palandjian told The Forum. “What you’ll see over the next few months is a series of investments that will catch you up to where the program is today.”
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