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 had been $40 million, $60 million, and $95 million, respectively. Then once more, the group has grown through the years from a one-man firm to a physique with an investing group, 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 firms, together with some that concentrate on 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 firms 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.

Firstly are its numbers, which look fairly good, particularly given how a lot cash it is had prior to now. Cowboy was an early investor in Guild Schooling, for instance, a web-based training firm centered on upskilling frontline staff, and has been acknowledged in $4.4 billion When it closed its final funding spherical in June final yr. 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 Collection 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 client startups, since Cowboy has additionally loved success with the latter. (Specifically, one of many first checks went to the Greenback Shave Membership, the boys’s grooming firm that Unilever acquired in 2016 for $1 billion.)

One other guess for the corporate is, 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 up to now; and SVT Robotics, whose program regulates robots in warehouses and factories (it has been closed $25 million in Collection A funding in late 2021).

Lee additionally mentioned 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 firms being both based by a lady or I co-founded it, and a few third of them had been based or co-founded by an individual of shade.

Whereas Cowboy may be very centered on the underside line, Lee says, it additionally goals to “have a constructive impression on the neighborhood round us. We’re not a social impression fund, however we get off the bed day by day a bit excited to show you will be superior at this job.” And in addition be a considerate human being on the similar time.”

Actually, the three companions mentioned 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 mentioned they’re much less keen about such compounds — it complicates constructing their very own portfolio when early-stage firms are additionally working later-stage capital swimming pools — Williams mentioned Cowboy traders did not blink on the concept. I prompt it was time.

“We have been writing follow-up scans to a number of our firms both via [special purpose vehicles] Or with our current funds, however not essentially within the measurement of the verify we’d have wished and even [given the room] Our founders have been giving us,” she mentioned final week. “As a substitute 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 group is happy to have recent capital to function after two years of froth. We noticed a number of incremental concepts, and that was very true within the second half of final yr. However with restricted budgets and the bar is increased when it comes to the worth you need to ship [your customers]She mentioned, “We predict we’ll see a lot better concepts as this yr goes by and the mud settles on the brand new regular for the surroundings.”

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