Cowboy Ventures Expands With $260M Through Two New Funds, Including Opportunity Fund TechCrunch

Cowboy initiativesThe now 10-year-old, Bay Space-based, seed-stage-focused fund based by celeb investor Eileen Lee, has closed on two new funds totaling $260 million in capital commitments. The group has secured commitments of $140 million for its fourth flagship fund and one other $120 million for its first opportunity-type fund (the “Mustang Fund”).

The quantity is bigger than the full capital raised by the group throughout its earlier funds, which have been $40 million, $60 million, and $95 million, respectively. Then once more, the crew has grown over time from a one-man firm to a physique with an investing crew, together with fintech specialist Jill Williams, who Lee recruited from Anthemis, and Amanda Robson, pulled from Norwest Enterprise Companions, the place she labored with a number of of enterprise software program corporations, together with some that target synthetic intelligence and robotics. (Longtime Silicon Valley legal professional Ted Wang can be carefully related to the fund as a “associate on the board” and advises greater than a dozen corporations from his portfolio.)

It is easy to see why LPs would allocate extra capital to Cowboy, even in a market that seems to be actively shrinking given the broader market turmoil.

In the beginning are its numbers, which look fairly good, particularly given how a lot cash it is had previously. Cowboy was an early investor in Guild Schooling, for instance, an internet schooling firm centered on upskilling frontline staff, and has been acknowledged in $4.4 billion When it closed its final funding spherical in June final 12 months. Cowboy can be an anchor investor in safety and compliance automation platform Drata, which is ready to $2 billion Valuation in December when it raised $200 million in Sequence C financing.

Picture credit: Cowboy initiatives

In a dialog with Lee, Williams, and Robson late final week, Lee famous that Cowboy considers itself a public firm, however that 70% of its latest fund has been funneled into startups and 30% into shopper startups, since Cowboy has additionally loved success with the latter. (Specifically, one of many first checks went to the Greenback Shave Membership, the lads’s grooming firm that Unilever acquired in 2016 for $1 billion.)

One other wager for the corporate is Vic.ai, a startup that automates accounting processes and has simply closed its 52 million {dollars} Spherical C in December; Homebase, a platform for small and medium-sized companies that helps with scheduling, payroll, money advances, and HR issues, has elevated approx. $100 million of traders thus far; and SVT Robotics, whose program regulates robots in warehouses and factories (it has been closed $25 million in Sequence A funding in late 2021).

Lee additionally stated that Cowboy prefers to put money into “pre-product” startups (about 70% of first checks fall into this class) and that from the beginning it has cultivated a various neighborhood of founders, practically half of its portfolio corporations being both based by a lady or I co-founded it, and a couple of third of them have been based or co-founded by an individual of coloration.

Whereas Cowboy could be very centered on the underside line, Lee says, it additionally goals to “have a optimistic influence on the neighborhood round us. We’re not a social influence fund, however we get away from bed day-after-day just a little excited to show you might be superior at this job.” And likewise be a considerate human being on the similar time.”

In actual fact, the three companions stated the thought was to proceed doing what Cowboy’s been doing all alongside, with the added twist of working a possibility fund to help excellent winners. Though LPs have stated they’re much less captivated with such compounds — it complicates constructing their very own portfolio when early-stage corporations are additionally working later-stage capital swimming pools — Williams stated Cowboy traders did not blink on the thought. I advised it was time.

“We have been writing follow-up scans to loads of our corporations both via [special purpose vehicles] Or with our current funds, however not essentially within the measurement of the verify we might have needed and even [given the room] Our founders have been giving us,” she stated final week. “As an alternative of leaving capital on the desk doing SPVs, this offers us the chance to pursue precisely the identical technique however multiply our winners, and our advertising and marketing companions actually see this as an extension of that technique.”

In the meantime, Robson famous, the crew is worked up to have contemporary capital to function after two years of froth. We noticed loads of incremental concepts, and that was very true within the second half of final 12 months. However with restricted budgets and the bar is greater by way of the worth it’s important to ship [your customers]She stated, “We predict we’ll see a lot better concepts as this 12 months goes by and the mud settles on the brand new regular for the surroundings.”

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