Cowboy tasksThe 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 larger than the whole capital raised by the group throughout its earlier funds, which had been $40 million, $60 million, and $95 million, respectively. Then once more, the workforce has grown over time from a one-man firm to a physique with an investing workforce, 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 target synthetic intelligence and robotics. (Longtime Silicon Valley legal professional Ted Wang can be intently related to the fund as a “associate on the board” and advises greater than a dozen firms from his portfolio.)
It is simple 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 up to now. Cowboy was an early investor in Guild Schooling, for instance, a web based schooling firm targeted on upskilling frontline workers, 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.
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. (Particularly, 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 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 Sequence A funding in late 2021).
Lee additionally mentioned that Cowboy prefers investing in “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, almost half of its portfolio firms being both based by a girl or I co-founded it, and a couple of third of them had been based or co-founded by an individual of shade.
Whereas Cowboy places a whole lot of emphasis on the underside line, Lee says, it additionally goals to “have a constructive influence on the neighborhood round us. We’re not a social influence fund, however we get off the bed day-after-day somewhat excited to show you could be superior at this job.” And in addition be a considerate human being on the similar time.”
The truth is, the three companions mentioned the concept was to proceed doing what Cowboy’s been doing all alongside, with the added twist of working a possibility fund to assist excellent winners. Though LPs have mentioned they’re much less obsessed with such compounds — it complicates constructing their very own portfolio when early-stage firms additionally run later-stage capital swimming pools — Williams mentioned Cowboy traders did not blink on the concept. I instructed it was time.
“We have been writing follow-up scans to a whole lot of our firms both by way of [special purpose vehicles] Or with our current funds, however not essentially within the dimension of the examine we might have needed and even [given the room] Our founders have been giving us,” she mentioned final week. “As an alternative of leaving capital on the desk doing particular function missions, this provides us the chance to pursue precisely the identical technique however with a multiplication of our winners, and our advertising and marketing companions actually see this as an extension of that technique.”
In the meantime, Robson famous, the workforce is worked up to have recent capital to function after two years of churn. We noticed a whole lot 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 when it comes to the worth it’s important to ship [your customers]She mentioned, “We expect we’ll see a lot better concepts as this 12 months goes on and the mud settles on the brand new regular for the atmosphere.”