Glasswing Ventures

Glasswing Ventures

Glasswing Ventures is raising $150 million to invest in early-stage companies working on artificial intelligence and cybersecurity technologies. Pictured above (left to right) are Rudina Seseri, co-founder and managing partner; Rick Grinnell, co-founder and managing partner; and managing director Sarah Fay.

Photos courtesy of Glasswing.

Liberty Mutual Strategic Ventures

Liberty Mutual Strategic Ventures

Liberty Mutual’s personal insurance business launched a venture capital arm last year called Liberty Mutual Strategic Ventures. The $150 million early-stage fund targets startups working on technology and services related to the insurance industry. Its first investment was in San Francisco-based August Home, a maker of smart locks and other home access products. Pictured above (left to right) are managing director Dan Robinson, managing director Russ MacTough, associate Josh Cohen, and senior analyst Annabel Yee.

Photos courtesy of Liberty Mutual.

The Engine

The Engine

MIT is raising $150 million for a venture fund that would be part of a broader entrepreneurship initiative called The Engine. The plan is to back young companies working on complex technologies in biotech, robotics, energy, and other areas. MIT is investing $25 million in the fund, which is still in the early stages and doesn’t have a leadership team in place yet, a spokeswoman says. In the above photo, MIT President Rafael Reif speaks at The Engine’s launch event in October 2016.

Photo by Andy Ryan, courtesy of MIT.

Pillar

Pillar

Pillar is raising $100 million for its fund, and backers include a group of 16 local tech entrepreneurs and executives who serve as mentors and board members for the firm’s portfolio companies. Pillar’s investments so far include PillPack, Desktop Metal, and Talla. Pictured above are partner Sarah Hodges (left) and founder and managing director Jamie Goldstein.

Photo by Marcy Rolerson Photography, courtesy of Pillar.

Underscore.VC

Underscore.VC

Underscore.VC, formerly known as Assemble.VC, raised $85 million for a fund investing in open-source software and “cloud intelligence” companies at the seed and Series A stages. The firm has assembled a network of tech executives and experts in various sectors to provide expertise and support to portfolio companies and, if they choose, invest in them. Underscore’s investments include Salsify, Mautic, and Zaius. Pictured above are (left to right) Michael Skok, co-founder and investing partner; John Pearce, co-founder and operating partner; Cory Bolotsky, community manager; C.A. Webb, co-founder and community partner; Richard Dulude, principal and investment manager; and Rob Wu, internal operations manager.

Photo courtesy of Underscore.VC.

Vestigo Ventures

Vestigo Ventures

Vestigo Ventures invests in early-stage financial technology startups. The firm is targeting $50 million for its first fund, but that amount could reach as high as $75 million, says co-founder and managing director Ian Sheridan. His firm’s first investment was in Boston-based LifeYield, which makes software tools to help manage money. Vestigo is led by Sheridan, managing director Mike Nugent, general partner Dave Blundin, and general partner Mark Casady. [This paragraph updated with more fund info.]

Stock photo by scanrail, courtesy of depositphotos.com.

G20 Ventures

G20 Ventures

G20 Ventures raised $63.45 million for its first fund that backs East Coast enterprise technology startups. Similar to Pillar and Underscore.VC, G20 formed a network of around 20 seasoned entrepreneurs, executives, and advisors to back the fund and support its companies. G20’s investments include Fuze, 128 Technology, Evergage, and Mautic. Pictured above are G20 co-founders Bob Hower (left) and Bill Wiberg.

Photo by Porter Gifford, courtesy of G20 Ventures.

Tectonic Ventures

Tectonic Ventures

Tectonic Ventures invests in early-stage software and hardware startups, primarily those working on medical devices, financial technologies, and the Internet of Things, says managing partner Matthew Rhodes-Kropf (pictured above, right). He and his partner, Morris Miller (above, left), have raised $40 million for Tectonic, but are targeting $50 million, he says. The firm is based in the Boston area, where Rhodes-Kropf lives. Miller lives in San Antonio, TX, where he runs Xenex Disinfection Services, a company that sells robots that sanitize hospital rooms. Tectonic’s portfolio includes Xenex, Kymeta, 55 Capital, and Humatics, according to its website. [This photo and description added after initial publication.]

Photo courtesy of Tectonic Ventures.

InTeahouse

InTeahouse

InTeahouse has raised a $30 million fund to invest in early-stage companies spanning robotics, cleantech, life sciences, fintech, new media, and telecommunications, a spokeswoman says. The firm is trying to build a global network of entrepreneurs and investors. It runs a co-working space in Cambridge, MA, and also has an office in Hangzhou, China. Pictured above is InTeahouse founder Xin Liu.

Photo courtesy of InTeahouse.

Massachusetts Innovation Catalyst Fund

Massachusetts Innovation Catalyst Fund

The Massachusetts Innovation Catalyst Fund has $25.8 million to invest in digital health companies located in the Bay State. The fund is being managed by an affiliate of Leerink Holdings. It’s part of a broader initiative backed by government and industry that is aimed at boosting the Massachusetts digital health sector. (A spokeswoman declined to comment on the fund for this article.)

Stock photo by Esbenklinker, courtesy of depositphotos.com.

Companyon

Companyon

Companyon is raising $20 million for a seed fund to invest in consumer technology, software-as-a-service, and other technology firms, says Companyon Capital managing director Tom Lazay. Its investments so far include GetHuman, Disruptor Beam, and Smartvid.io. The fund’s affiliated Companyon Foundry provides business services and expertise to help startups get funded, bring products to market, and grow their businesses, Lazay says. Pictured above (left to right) are Lazay; Parthib Srivathsan, the foundry’s managing director; and Companyon founding partner Andy Coughlin.

Photo courtesy of Companyon.

LaunchByte

LaunchByte

LaunchByte is part incubator and part micro-VC fund. Its team provides services to startups---such as developing software and helping with budgets---and the companies have the option to compensate LaunchByte with an equity stake in the startup, or a combination of cash and equity. LaunchByte also makes direct investments in companies from a $5 million fund, which is fueled by revenue from its services business and returns from portfolio companies that exit, says founder and managing director Tan Kabra (pictured above). He says LaunchByte has had two exits so far, but he says he can’t disclose more information about those deals.

Photo by John Lee, courtesy of Tan Kabra.

The Graduate Syndicate

The Graduate Syndicate

The Graduate Syndicate is a $2.4 million fund managed by Flybridge Capital Partners general partner Jeff Bussgang, according to Flybridge marketing partner Kate Castle. The fund invests in “pre-seed” and seed-stage startups led by graduates of Harvard. Bussgang (pictured above) is also a senior lecturer at Harvard Business School. The Graduate Syndicate has backed Lovepop, Camino Financial, Baroo, and others, according to its website.

Photo courtesy of Flybridge.

Hyperplane Venture Capital

Hyperplane Venture Capital

Hyperplane Venture Capital invests in seed-stage machine intelligence and data technology startups. The firm isn’t commenting on how much funding it has raised, but it has made 16 investments so far, says founder and managing partner Vivjan Myrto. Its portfolio companies include Vesper, Indico, TellusLabs, Talla, and Sentenai. Pictured above (left to right) are Myrto; Hyperplane associate Dan Hurwitz; co-founder and managing partner John Murphy; managing partner Jack Klinck; and co-founder and venture partner Brendan Kohler.

Photo courtesy of Hyperplane.

Good Growth Capital

Good Growth Capital

Good Growth Capital creates early-stage venture funds for universities “and other affinity-based groups,” according to its website. (Founder Shereen Shermak declined to comment for this article.)

Photo "Money!" by Flickr user Tracy O used under Creative Commons 2.0 and 4.0 licenses.

[Updated 2/6/17, 5:15 pm. See notes in photo slideshow.] Boston’s venture investing community looks a lot different today than it did just two years ago.

A new crop of venture funds has emerged to back the next wave of technology startups and, as Xconomy observed last year, perhaps change the way companies get funded and built in the Boston area.

Our recent analysis of the local venture scene found 15 early-stage, primarily tech-focused funds that have either started investing or announced their formation since the beginning of 2015. We only included brand new venture firms and other types of organizations that have raised (or are in the process of raising) their first venture fund. (See slideshow above, and drop me a line at jengel@xconomy.com if I’ve missed any.)

The first-time funds have arrived at a time of change for the Boston venture investing scene. Some long-standing local venture capital firms—such as CRV and Greylock Partners—have shifted much of their focus to the San Francisco Bay Area in recent years. And just last week, Accomplice (formerly the tech side of Atlas Venture) said it plans to expand on the West Coast, after years of focusing on Boston-area investments.

Meanwhile, other firms have stopped raising new funds. The 2015 decision by Waltham, MA-based North Bridge Venture Partners to put the brakes on raising its eighth early-stage fund, for example, has had ripple effects on the local investor community. Two former North Bridge general partners have started new venture firms: Jamie Goldstein founded Pillar, and Michael Skok co-founded Underscore.VC.

Now, the new local players will get a chance to make their mark.

“To me, this is huge,” Founder Collective managing partner Eric Paley says of the new funds. “It’s exciting, new energy being infused on the capital side, which I think will really help entrepreneurs.”

Paley considers his eight-year-old firm the first of the “next-generation seed funds in Boston,” he says, along with NextView Ventures (founded in 2010), Project 11 Ventures (2010), and Data Point Capital (2012). (Boston Seed Capital, launched in 2010, is another one.) Paley thinks the recent influx of new funds will be a boon for both company builders and investors.

“I think you’ll see a lot more collaboration among VCs over time … and a lot of new, interesting venture experiments that should provide value to entrepreneurs,” he says.

The new funds boost the amount of seed capital available in Boston, a metric by which it has trailed places like San Francisco and New York in recent years, says CRV general partner Izhar Armony. He notes that about half of CRV’s investments are at the seed stage, but firms specifically focused on earlier-stage investments make a lot more of those deals.

“I really welcome this,” Armony says of the new Boston funds. “It basically gives early-stage companies more opportunity to get funded.”

Although CRV now has six investors based in the San Francisco area and four at its office in Cambridge, MA, Armony says the firm hasn’t given up on its hometown. “We are very bullish on Boston,” he says. “The market has shrunk a bit, but for the venture firms that are still here, like CRV, I think there are great opportunities.”

Some of the new Boston-area funds are led by familiar faces in the local venture community, such as ex-North Bridge partners Goldstein and Skok, as well as Glasswing Ventures’ Rudina Seseri and Rick Grinnell, both previously with Fairhaven Capital.

Others are newcomers. For example, Vestigo Ventures’ Ian Sheridan and LaunchByte’s Tan Kabra are both first-time managing directors of venture funds, according to their LinkedIn profiles.

The 15 funds represent a broad mix of structures and strategies. Many of them fit the general mold of a traditional venture firm. But the group also includes a corporate venture fund (Liberty Mutual Strategic Ventures); a fund launched by a university (MIT’s The Engine); hybrid firms that make investments and offer business services (LaunchByte, Companyon); and a firm that “creates venture funds for universities and other affinity-based groups,” according to its website (Good Growth Capital).

Some of the new funds are departing from the typical venture capital model in key ways. Pillar, for example, has said it’s buying common stock in startups, not preferred stock. And Pillar, Underscore.VC, and G20 Ventures have each built their funds and strategies explicitly around networks of local tech founders and executives who serve as investors, mentors, and other roles with portfolio companies.

Several of the funds have specific investment criteria they’ve shared publicly. For example, Vestigo backs financial technology startups; the Massachusetts Innovation Catalyst Fund plans to invest in digital health companies; and The Graduate Syndicate focuses on startups led by Harvard grads.

It’s not surprising that many of the funds are focusing on niche sectors and taking different approaches as compared to other investors (or at least saying that they’re doing things differently). The competition for deals has gotten fierce, as hundreds of new micro-venture firms have set up shop in the past several years.

“I think if you’re going into that market right now, you’ve got to think about very strongly how you want to tell your story and how you’re going to differentiate yourself,” Paley says.

And that’s a good thing for the startup community, he says. “You get a lot of experimentation with companies and experimentation with models,” Paley says. “Not everything will stick, but I think overall these are smart people putting forth useful hypotheses worthy of being tested.”

Still, CRV’s Armony doesn’t expect experiments by early-stage venture firms to have a significant impact on how the industry operates. He argues that most of the innovation in venture capital has come from … Next Page »

Jeff Engel is a senior editor at Xconomy. Email: jengel@xconomy.com

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