Austin-based VC LiveOak Venture Partners, which focuses on early-stage tech startups in Texas, has closed a $210M oversubscribed fund to continue investing in industry leaders across the Lone Star State.
Fund III will continue LiveOak’s strategy of building disruptive, “world-class category winners” out of Texas. According to the team, it’s the largest institutional Texas-focused, early-stage venture fund in the past decade.
The new fund will keep theme with the firm’s mission, honing in on the state’s four largest tech hubs: Austin, Houston, Dallas, and San Antonio.
LiveOak has a track record of investing in Dallas-Fort Worth companies. Co-Founders and partners Krishna Srinivasan and Venu Shamapant previously told Dallas Innovates that DFW is a critical region for the firm, as it has “moved beyond the image of just telecom.”
“Dallas is a very, very important piece for our strategy,” Shamapant said. “Dallas is evolving in a very nice fashion.”
Local success stories include: Richardson-based Spatial, which exited to Alacatel in 2005 for $250 million; Mavenir Systems, acquired in 2015 by Mitel Corp. for $560 million; and Richardson-based Navini Networks, acquired by Cisco in 2007 for $330 million.
Overall, LiveOak has led or co-led investments in around 50 Texas companies since its flagship fund debuted in 2012. These companies have gone on to raise a collective more than $1 billion to-date.
“The success we have had to date is a strong validation that our entrepreneur-first approach and strategy of being active lead investors in early-stage Texas tech startups has been the right approach,” Srinivasan said in a statement. “With the explosion of momentum in the Texas entrepreneurial scene, we are poised to further capitalize on it and help create the next generation of leaders out of Texas in the years to come.”
Fund III closed above its hard cap and brings AUM under active management to almost $500 million. Investments are expected to start in the first institutional rounds, with initial capital consisting of $1-5 million and scaling up to $15 million over a company’s full lifecycle.
The fund’s investors include top pension funds, university endowments, foundations, family offices, and Austin entrepreneurs. The firm said that numerous founders and executives from portfolio companies of its first two funds also invested.
“As we reflect on a journey that we embarked on 10 years ago, we are incredibly humbled and gratified by the trust our investors have placed in us that enabled us to get here,” Shamapant said in a statement. “We also couldn’t have done it without the support of the tenacious entrepreneurs that we work with daily. The firm is primed to scale and build a successful long-term venture franchise in the Texas market.”
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