Fund News


Boulder-based Foundry Group raises another $225M fund

The early-stage VC firm closes its third fund for thematic investing

Innovation series by Faith Merino
September 14, 2012 | Comments
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“Thematic” seed investment firm the Foundry Group is marching forward with another big fund.  The VC firm announced Friday via its blog that it has closed its third fund to the tune of $225 million—the same amount as the last one—which was the same amount as the one before that.  Thus, the group has been able to recycle the same blog post for today’s announcement.

The Foundry Group boasts an impressive portfolio of companies like Zynga, Federated Media Publishing, StockTwits, Lijit Networks, BigDoor, and Cheezburger, among others. 

The Boulder, Colorado-based VC firm is best known for its investment “themes,” rather than geographic locations or specific technologies (though the team members admittedly focus on software and information technology.  Themes include Adhesive (AdTech related companies), Digital Life (companies that allow Web users to access their digital assets), Distribution (new distribution methods like Facebook and Twitter), Glue (software that facilitates computer-to-computer interaction), Human Computer Interaction (companies that change the way people use computers), and Protocol (companies that focus on protocols, like SMTP, RSS, XML, and SMS).

Keeping with the Human Computer Interaction theme, in July, The Foundry Group led a $3 million investment in robot construction platform Modular Robotics, which is building a programmable robot construction platform.  Its first product, Cubelets, consists of a bunch of magnetic blocks that can be linked together to build a robot that can drive around and respond to light, sound, and temperature.

Also in July, The Foundry Group led a $7 million investment in Full Contact (Protocol theme), which is building something akin to a universal, cloud-based contact list for everyone.

Might there be a new theme on the horizon?

“We are always looking at stuff and evaluating new themes.  If I were to bet, there might be a new one some time in the future, but it's far from a sure thing,” said Managing Director Jason Mendelson in an email.

When asked what he thinks will be big in 2013, Mendelson answered:  “I actually don't care.  I try to divorce myself from what is big/hot.  As an early stage investor, you can't chase ‘hot’ and be successful.”

The four-man Foundry Group team includes Jason Mendelson, Brad Feld, Seth Levine, and Ryan McIntyre.  Brad Feld is also the co-founder of TechStars.

The announcement of the new fund follows on a few other new funds that have popped up recently, including a $30 million fund that’s in the works at fellow seed VC firm Lerer Ventures.  Earlier this month, Nexus Venture Partners announced its new $270 million fund for early stage investments in Indian companies.

Funding landscape 

Foundry' Group's fund is one of the many being raised in 2012, a year that is on pace to see the most VC money raised since 2008. Last week, Thrive raised a $150 million fund.

Kleiner Perkins Caufield & Byers closed a $525 million fund In May. In April, early-stage venture capital firm First Round Capital announced that it was going to raise its fourth fund, with a target of $135 million, while Berlin-based Earlybird raised a $100 million fund. In March, Groupon investor NEA filed with the SEC to raise $2.3 billion, while DST, one of Facebook's biggest investors, was looking to raise $1 billion.

Andreessen Horowitz secured a $1.5 billion fund in January, announcing it had raised $2.7 billion in three years. While it has only been around since 2009, Andreessen Horowitz is already a top VC firm, raking in siginificant management fees.

In June, Khosla Ventures announced a new fund for an undisclosed amount, while Madrona Venture Group closed a $300 million fund.

In August, Sequoia Capital has its goal of raising $975 million for three early-stage funds, and just yesterday Nexus Venture Partners, a venture firm whose major focus is on India-based technology startups, announced Thursday that it's raised $270 million for its third fund.

In the second quarter of 2012, 38 VC firms raised a total of $5.9 billion, according to the National Venture Capital Association.

If the next two quarters continue the same pace, 2012 will see the most money raised since 2008.



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