Venture capital firms continue to raise new funds at what seems like lightning speed. Two companies have exited in recent days, including $100 million for Fund III and $20 million for Opportunity Fund and VMG Catalyst’s $400 million Fund II for Urban Innovation.
Both organizations are led by women, Clara Bruner and Julie Lane at Urban Innovation Fund, and Brooke Kiley at VMG. What is unique about these two is the narrow focus that each fund had. As the name suggests, the Urban Innovation Fund invests in companies developing technology to shape the future of cities, while VMG targets business.
Before starting the Urban Innovation Fund, Bruner was in commercial real estate development and met Lin as a political candidate and consultant at MIT’s business school. In their first two years, they established the largest women’s event on the MIT campus at the time.
Before coming together around a love of startups and the urban tech scene, each tried to recruit the other to start a company in their respective industries. The firm invests in companies that work on livelihoods, sustainability or economic viability and often face regulatory and political challenges.
Brunner believes that having such a narrow thesis and other unique characteristics came in handy when the fund raised its third tranche earlier this year.
“I think we’re different, we have a different strategy and a strong track record of investing,” he told TechCrunch. “That means the round came together faster than we expected. We were shocked at the speed.”
The Urban Innovation Fund is a 100% woman-owned organization, and 77 percent of the companies it supports had a woman or person of color on the founding team.
According to Cambridge Standards, the Urban Innovation Fund is a top 1% fund of funds and has invested in companies such as electric vehicle charging software company Electrifi, ESG asset management company Ethic, which was acquired by Ford in 2021. Management and small business lending platform, Jeeves, was valued at $2.1 billion earlier this year.
Brunner and Lane plan to raise $80 million in January, meeting their $100 million cost, with 95% of their new capital coming from institutional investors. It’s not a bad problem to have, but Bruner says that limited partners from the past had a large base and had to turn away investors.
That’s how the Urban Innovation Fund, a $20 million opportunity fund, became the first in this category. Previously, the firm used special purpose vehicles to invest in single deals, and in the past few years has raised several to invest later in companies that have exited its portfolio.
“Now that we have a new venture fund, we don’t need to do SPVs,” Brunner said. With the new vehicle we can make all the late tracking investments.
The Urban Innovation Fund activated its third fund in July, so it’s hard at work with a few new startups, but hasn’t made any investments yet. The average check size of previous funds was around $1 million, and the new fund will allow that to grow to $1.5 million. The fund seeks to lead or become a big second check in about 30 seed-level rounds.
At VMG Catalyst, Brooke Kiley, Founding Partner, was in venture capital starting at Insight Partners after graduating from Wharton. “She’s always had a passion for entrepreneurship, and the idea of working side-by-side with startups seemed like a dream job,” she told TechCrunch in an email.
Kiley left Insight in March 2020 to join VMG Catalyst. The company’s initial funding was $250 million, and it recently closed on a $400 million Series II. VMG typically leads Series A and Series B rounds ranging in size from $8 million to $50 million. He has made 22 investments so far, and his writing revolves around business enablement software and marketplaces.
The second fund is 60% larger than the first, with most of the growth coming from specific partners, she said.
In the second fund, the company made three investments in vertical supply chains. Among them is Milk Movement, which provides supply chain tools for the dairy industry.
“We believe innovative software and sophisticated supply chains will define the next generation of leading brands and retailers,” said Kiley. “With VMG’s history, we have a unique position as CPG investors in the consumer industry, and this allows us to invest with certainty and speed, serving as committed strategic partners in today’s fast-paced and competitive landscape.”
More new funds
As we’ve mentioned before, venture capital firms have more dry powder than ever, and the past few weeks have been no exception.
- Upper90 had an initial close of $180 million in seed funding.
- E-commerce accelerator Southern Coal has launched a $50 million accelerator fund to provide capital, guidance and operational resources to industry founders. South Coal is a joint venture between SellersFunding, Global Wired Advisors and Escala.
- FRAMEWORK, which invests in Series A and Series B companies, said it has closed more than $100 million for its Fund II for the first time and expects to close the fund by the end of the year, targeting $250 million. It also unveiled its new venture capital model, which uses proprietary data, growth and operational frameworks to “reinvigorate the early-stage investment ecosystem and facilitate smart, high-growth growth in startups.”
- CEI Ventures, which manages socially responsible venture capital funds, closed its fifth fund – known as the “Good Works Fund” – in July for $21.5 million, the largest fund in its history, according to the company.
- Silversmith Capital Partners Two months later, he closed the fourth fund With a commitment of 1.25 billion dollars from certain partners. Silversmith Group’s fund will cost $90 million to make it the firm’s fourth largest, bringing its total capital to more than $3.3 billion since its inception in 2015.