Cowboy Ventures has once again set the precedent in the seed-stage investing world, with its latest two funds totaling $260 million. With this capital influx, Cowboy Ventures will be able to provide more funding and opportunity to growth-focused startups in Silicon Valley and beyond. In addition to giving startup founders a wider battlefield on which to compete, the new funds come at an opportune time for Cowboy Ventures as Equity Capital Markets report that venture capitalists are increasingly turning their attention back to early stage investment.
With a whopping $1.1 billion raised in their latest round, it seems fair to say that Stripe is one of Silicon Valley’s biggest success stories. Founded just eight years ago by Benedict Wong and Patrick Collison, Stripe quickly emerged as a leading fintech platform, helping companies process payments online. Now with more than 1,000 employees and support from top-tier investors such as Andreessen Horowitz and Index Ventures, the company looks primed to continue its meteoric rise.
Given the volatility of the broader market, it’s good to see that Cowboy is sticking with a portfolio focused on companies with strong fundamentals. Its investments in Guild Education and Drata, for example, look like they’ll have a positive impact on society as a whole. Cowboy is also one of the first investors in many of these newer companies, which gives it an advantage over other investment firms.
Given Cowboy’s focus on enterprise and consumer startups, the firm’s recent portfolio allocation may indicate that it sees these segments as differentiating opportunities. This differentiation could be underpinned by differences in the stages of startup development or differentiated customer bases. By allocating more of its funds to enterprise startups, Cowboy may be hoping to capitalize on corporates’ nascent CEO inventories, while continuing to serve early-stage consumer companies with innovative products and services.
Vic.ai is one of the company’s newer ventures. It automates accounting processes for businesses, and just raised a $52 million Series C round in December. Homebase is another startup within the same vein as Vic.ai – it helps small to mid-size businesses with scheduling, payroll, cash advances and HR stuff. Additionally, SVT Robotics specializes in organizing robots in warehouses and factories; it closed on $25 million in Series A funding late last year. These four startups are just some of the many that Inverse has highlighted as being poised for success over the next few years
What are some of the unique benefits that Cowboy can offer entrepreneurs?
Cowboy’s focus on pre-product startups allows it to seek out highly promisingstartups before they have anything tangible to market. This helps Cowboy avoid investingin early rounds in companies with moreestablished competitors or those with unproven businessmodels. Additionally, through its communitybuilding efforts, Cowboy strives to bring together founders of color andwomen, who may not typically have access to the capital necessary toprofit from their entrepreneurial endeavors. Ultimately, these initiatives aim toprovide disadvantaged entrepreneurs with the opportunity for sustainable success.
Since Cowboy launched in 2015, the company has seen success with its opportunity fund and believes it is a valuable tool for identifying breakout companies. The fund has already supported four successful exits and continues to back promising companies that could reach further heights in the near future. Partnering with an LP will allow Cowboy to keep up its strong track record while also benefiting from the LPs’ expertise and capital.
Founded in 2012, social networking company Klout has steadily grown its user base, as well as its valuations. The company is now seeking to grow even further by issuing a Series C round of funding that would value the company at $1 billion. With this influx of capital, Klout will be able to accelerate its growth plans and continue courting new users while also investing in technology and marketing initiatives. While this sizable investment may come as a surprise to some observers, it is indicative of the continued trend of social media companies achieving high valuations despite intermittent periods of growth.
