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As Silicon Valley venture capitalists express increasing interest in investing in companies outside of their backyard, more groups are trying to get these VCs to the Midwest, even if just for a few days to meet with the region’s companies who can pitch them on why they should invest there.

One of those groups is Heartland Ventures, a new venture capital firm based in South Bend, Indiana. This week, Heartland Ventures is leading about half a dozen venture capitalists on a tour of Northwest Indiana, a very manufacturing-heavy part of the state, to meet with some family-run businesses as well as young tech startups.

These types of tours have been dubbed “Rust Belt safaris” by their critics, for taking VCs on what they see as a superficial tour of the Midwest, without leading to a meaningful shift in investments. Heartland Ventures founder and managing director Max Brickman was one of the investors who met with Silicon Valley VCs when they stopped in South Bend as part of one of those tours led by congressional representatives Ro Khanna (D-CA), and Tim Ryan (D-OH).

But for Heartland Ventures, there’s a real business stake here — the firm coinvests alongside other venture capital firms, mostly in coastal startups looking to expand to Indiana. The firm has invested in five portfolio companies since it launched in 2016, and is in the process of closing its first fund. Investments include Mimir, an Indiana edtech company that went through Y Combinator in 2015, and SpidrTech, a Los Angeles-based law enforcement tech company whose investors also include Kairos and the investing arm of Alphabet’s Sidewalk Labs.


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Brickman says that the VCs on this week’s tour will be meeting with companies ranging from JayCo, a nearly 60-year-old RV manufacturer, to Springbuk, a health care software startup that raised $20 million in funding last year.

“The goal is to be able to one, create conversation between the coastal VCs that are investing and helping develop automation technology and the actual users of it, from the CEOs that are making the decisions to actually purchase and implement it down to the frontline blue-collar employees who are the ones either displaced by it or are actually the users of it,” Brickman told VentureBeat in a phone interview.

As of 2017, manufacturing companies employed nearly 17 percent of Indiana’s workforce, the highest percentage among any state in the nation. So any company that wants to automate manufacturing processes is likely going to have to go to Indiana to meet with potential customers at some point.

Brickman also notes that politicians like to use Indiana’s manufacturing-intensive small towns as a backdrop for speeches on the nation’s economic health — former President Barack Obama visited Elkhart, one of the stops on Heartland Ventures’ tour, in both 2009, when the unemployment rate there was 19 percent during the depths of the Great Recession, and in 2016, when the unemployment rate in Elkhart had shrunk to 4 percent. So, Brickman’s theory goes, more venture capitalists should visit places like Elkhart if they want to understand how the economy is working for consumers outside of the coasts, and what they’re spending their money on.

Damir Becirovic, a principal at Index Ventures, is one of the investors going on the tour. He said that he first met Brickman on a tour he and other VCs took to visit hardware startups in Beijing and Shenzen, China. The two talked about “how interesting it was that we could assemble so many people to go to China for such a learning trip, but how a lot of people have not done that in our own backyard,” according to Becirovic.

Index Ventures claims dual headquarters San Francisco and London, and Becirovic said that the firm has historically focused on sourcing investments from the biggest cities in Europe and the United States, it’s now starting to see “more and more companies emerging from new geographies.”

“In Europe, for example, UiPath, which is probably the fastest-growing software company out of Europe of all time, actually came out of Eastern Europe, an area we haven’t spent much time in historically. So we’re also trying to think what new tech ecosystems could look like in the U.S.,” Becirovic told VentureBeat.

Becirovic said that he’s also looking to invest more in software startups that target workers in industries beyond the office-based, knowledge-economy employees that are used to Slack and Dropbox.

“We’re increasingly thinking about how do you build software to make other types of work more efficient, so I’m really excited to kind of see how workers here and in more maybe offline jobs by nature go about organizing themselves, communicating, and things of that nature,” Becirovic said.

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