Hunter Walk and Satya Patel's Homebrew raises $50M fund

Steven Loeb · February 21, 2015 · Short URL:

The firm also announced that it raised a $35 million follow-on fund, called Moonshine

Homebrew, a seed-stage fund started by former Google and Twitter executives Hunter Walk and Satya Patel, launched in 2013 to focus on what it calls tje "Bottom Up Economy," or the idea that technology is now helping individuals and small businesses drive economic growth and innovation. 

That vision seems to be working out well, as firm has just raised money for two new funds, the firm has revealed

The first is a $50 million seed fund called Homebrew II, with which the firm intends to deploy entry capital over the next two and half to three years.

"Our sweet spot is, and will remain, playing a leadership role in first institutional financing rounds," it wrote in a blog post, with an investment of between $500,000 and $1 million, as part of a round between $1 million and $3 million.

On top of that, Homebrew also announced that it has raised a $35 million fund, called Moonshine, for follow-on investment," primarily B rounds and beyond."

Homebrew's initial seed fund was $35 million, and the firm used that funding to make investments in 17 different companies. In the last year those investments have included Pillow Homes, a provider of short-term rentals; Chime, a bank account and rewards app for mobile millennials; TrueAccord, an automated debt recovery platform; on-demand shipping startup Shyp; and Layer, a communications platform for mobile and web apps.

"We want to invest in hyper-growth companies, not be a hyper-growth fund. Homebrew is committed to being the partner of choice for early stage founders. We want to focus 100% of our attention on the first few years of company building," the firm wrote. "In this funding environment, for both companies and VCs, there’s a temptation to maximize how much capital you raise."

The firm "raised less than we could have," but also "as much as we wanted, given our strategy and approach."

So what's next for Homebrew? Well, obviously it's going to be a while before the firm raises another fund; it even noted that the initial fund was invested in just two years, while this one will take around three. But the firm is already looking down the road at what it will do when it does raise the next amount of money.

"A new VC fund is kind of like a startup, just one that writes checks instead of code. Raising a first fund is a like a seed round, often built on reputation and potential. Second funds are like A Rounds — momentum with some early data," it wrote. "By the B round, startups need to have proven product/market fit. Similarly, our next fund, several years down the road, will be driven by having backed great teams and delivered great returns - not vanity metrics, not retweets, not personal brands."

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