UK, partners awarded ‘Build to Scale’ grant to support Kentucky startups, diversify investors

The University of Kentucky and its partners are one of 60 programs awarded “Build to Scale” grants from the U.S. Department of Commerce.

Sixty organizations in 36 states, the District of Columbia and Puerto Rico were awarded. In total, $53 million will fund programs that support technology entrepreneurs, catalyze innovation and fuel economic growth. The selected regions are growing technology-driven businesses, creating high-skill, high-wage jobs and building the industries of the future.

This round of grants featured two competitions — the Venture Challenge and the Capital Challenge. Each challenge had multiple funding tiers designed to support organizations at different levels based on their needs, capacity and vision.

UK, in partnership with Keyhorse Capital, the investment arm of Kentucky Science and Technology Corporation (KSTC), is a 2023 Capital Challenge Grant recipient. The project “Invest Blue — Supporting Kentucky Startups, Developing Venture Capital Managers” was awarded nearly $1.5 million in total, including the federal award with a local match from UK and Keyhorse Capital.

“The Invest Blue team is excited about this opportunity to engage and empower a new legion of individuals with affinity to support Kentucky startups in this effort to diversify and democratize access to capital,” said Eric Hartman, the project’s principal investigator and senior associate director of commercialization, UK Office of Technology Commercialization.

Invest Blue is a partnership between UK’s startup accelerator Launch Blue and Keyhorse Capital. 

“Launch Blue is thrilled to partner with Keyhorse Capital in this new initiative supporting startup programs and increasing access to investment opportunities for underserved communities,” said Laura Halligan, Launch Blue executive director. “We hope this work will have a long-lasting positive impact for the startups and emerging investors in our region.”

The project has three main goals: create the Invest Blue investment network, invest in 30 Kentucky startups, and form a sustainable venture fund for technology-based, new therapeutic, material, medical devices with a high degree of technical risk and social innovation-focused startups.

"Empowering the next wave of capital allocators in Kentucky, diverse in thought and background, is not merely a goal — it's our vision for shaping a future centered on innovation,” said Kelby Price, managing partner at Keyhorse Capital. “At Keyhorse Capital, we work with partners like the Kentucky Cabinet for Economic Development to cultivate an investor ecosystem that fosters growth and funds transformative innovations, driving the evolution of Kentucky's entrepreneurial landscape."

Keyhorse Capital invests seed and early-stage venture capital, in partnership with the Kentucky Cabinet for Economic Development, to support entrepreneurs willing to build and scale innovative companies in Kentucky. So far, Keyhorse has invested over $55 million in more than 250 Kentucky companies on behalf of KY Innovation through the Kentucky Enterprise Fund and KSBCI 2.0.

“Access to capital is a critical component of our growing innovation-driven economy,” said Terry Samuel, president at KSTC. “By creating a sustainable, diverse network of investors, we’re making access to capital more equitable for Kentucky’s entrepreneurs and generating opportunities for innovators solving some of today’s toughest challenges.”

KSTC is a private, nonprofit corporation committed to advancing innovative economic development in Kentucky.    

The Build to Scale grants, administered by the Commerce Department’s Economic Development Administration (EDA), aim to accelerate technology entrepreneurship by increasing inclusive access to entrepreneurial support and startup capital. These EDA investments support innovation industries, such as agriculture technology, blue economy, bioscience, advanced manufacturing and health technology, among others.

This is the 10^th cohort for this program and includes nonprofits, universities, government agencies and other entrepreneurship-focused organizations. The full list of grant recipients is online here.