As we near the end of the year, Crunchbase data reveals that early-stage venture capital investment continues its decline. However, one firm is not letting this trend slow them down.
TechCrunch has learned exclusively that BoxGroup, with locations in New York and San Francisco, has quietly secured $425 million in commitments for two new funds. Partner David Tisch confirms that BoxGroup Six, a fund focusing on pre-seed and seed-stage companies, and BoxGroup Picks, its third opportunity fund, are both valued at $212.5 million.
Over the past 13 years, BoxGroup has invested in various companies including Ramp, Warp, Hex, Solugen, Vial, Arcadia, Nourish, Coast, Turquoise Health, and Backbone.
Tisch describes BoxGroup as a well-rounded firm with a focus on five categories: consumer enterprise, healthcare, financial, biotech, and climate. The four partners have been working together for nearly a decade and have since added two new associates, making the firm a team of eight.
These new funds come two years after BoxGroup raised $255 million for its fifth early-stage fund and second opportunity fund. Tisch notes that the sixth early-stage fund is nearly double the size of the previous one.
“Amidst the current climate, the growth of our early-stage fund is quite noteworthy,” Tisch shares. “In fact, it has increased significantly. We have also welcomed a few new partners who bring a lot to the table, including large institutional LPs joining our group for the first time.”
BoxGroup specializes in investing in the earliest stages of a company’s development, primarily pre-seed, seed, and Series A rounds. They often lead pre-seed funding rounds and plan to use the capital from the new funds to invest in 40 to 50 new startups with check sizes ranging from $500,000 to $1 million.
While BoxGroup’s core investments are first-time founders, Tisch notes that they have recently been in talks with second and third-time founders, some of which they have not previously backed.
Tisch also notes that the slowdown in investments this year can be attributed to a decrease in the pace of company creation, stating that it has been “dramatically lower than at any point in [his] 14-year career, down upwards of 75%.”
“This trend can also be seen in the overall numbers for venture capital and funding, but we have personally felt and observed it,” Tisch says. “When we look back at the timing of our previous raise, the market was booming at the time. However, over the past six months, things have returned to a more ‘normal’ state, resembling the market conditions of 2018 and 2019.”
Despite the challenges, Tisch still believes that it is an exciting time to invest in early-stage companies. He points to artificial intelligence as a driving force behind new investments and notes that companies are entering the market with more intention and consideration for the current opportunities available.