Album VC, a Lehi, Utah-based early-stage enterprise agency that’s been identified till now as Peak Ventures, simply gathered up $75 million in capital commitments for its third early-stage fund.
The event reveals investor confidence in Album’s younger workforce, which got here collectively in 2014 after the founding father of Zinch — a website connecting schools and college students that sold to the ed-tech firm Chegg in 2011 — determined to attempt his hand at investing in different startups.
As that founder, Sid Krommenhoek — who stayed on with Chegg for a number of years, working its worldwide efforts — explains it, “I believed I’d do one other startup. However I additionally knew from our personal expertise in struggling to raise money the necessity for extra capital in Utah, and I believed having that operator-entrepreneur perspective might be helpful.”
A primary fund, like many within the business, was extra of an experiment, although it was an honest $23 million, thanks largely to the assist of Chegg CEO Dan Rosensweig, who was early to commit capital to the fund. A second ($56 million) fund adopted when Krommenhoek and John Mayfield — a buddy who joined him from a advertising function at Qualtrics — started investing extra severely of their yard and past.
They had been quickly joined by a 3rd investor, Diogo Myrrha, who started as a principal with the agency and is now a common accomplice. Explains Krommenhoek of one of many many issues that binds the three Brigham Younger College grads, “All of us got here into Utah’s orbit when it wasn’t essentially a spot the place you might reside out your profession, however that’s modified.”
Certainly, Album’s momentum — Krommenhoek claims they raised their new fund in a single month’s time — additionally underscores the persevering with development of the startup scene in Utah, the place a rising variety of home-grown corporations have paid off in a giant approach for his or her backers, creating new wealth that’s now being reinvested.
Album isn’t an investor in two of Utah’s largest success tales, Qualtrics and PluralSight, but it surely jumped early into two others that will need to have gotten its restricted companions excited. One in every of these is Podium, a fast-growing, five-year-old, Utah-based firm that helps companies handle evaluations and talk with clients on-line and that has thus far raised roughly $93 million, together with from IVP, GV and Accel. The opposite is Divvy, a three-year-old, Utah-based firm that helps companies handle funds and subscriptions, construct strategic budgets and eradicate expense stories. Divvy has raised greater than $250 million from buyers, together with New Enterprise Associates, Perception Companions and Pelion Enterprise Companions.
As for the way it will make investments its latest capital pool, Krommenhoek says the concept is to spend money on roughly 24 corporations, roughly half of them in Utah. He additionally says the agency tends to fund extra mature seed-stage offers, that means corporations which have moved previous the paper-napkin section and may show that their services or products is gaining some early traction.
That gained’t change with this new fund, although the scale of the common verify might be barely increased than up to now, starting from $1 million to $1.5 million in alternate for not less than 10% of an organization. “We prefer to personal double digits,” says Krommenhoek. “What we do at this stage doesn’t scale as a result of human relationships don’t scale. You may solely have a finite variety of deep relationships.”
By way of the agency’s areas of curiosity, Krommenhoek suggests these are broad, however that Album — a reputation meant to trace on the agency’s collaborative nature — is most comfy with software-as-a-service startups, marketplaces and firms targeted indirectly on the way forward for work.
Above, from left to proper John Mayfield (common accomplice), Lisa Thomas (engagement), Sid Krommenhoek (common accomplice), Diogo Myrrha (common accomplice) and Steve Hale (operations).