On Tuesday, New Mexico's State Investment Council approved commitments to a pair of venture capital funds, both managed by firms headquartered in California, worth a total of $70 million.
The governmental body, which oversees billions in funds for New Mexico, also committed $75 million to a life science-focused venture fund managed by a Boston-based investment firm.
SIC's two California commitments came out of the Council's New Mexico private equity program. That program is intended to give a small portion of state Severance Tax dollars to riskier venture funds that may or may not be based in New Mexico, with the promise of those funds finding investments in companies that are headquartered in the state.
The first of those two commitments, worth up to $20 million, went to the fourth fund of Airbus Ventures, a Menlo Park-based venture firm with approximately $400 in assets under management. The firm has some existing exposure to New Mexico; it counts SpinLaunch and Universal Hydrogen among its portfolio, two companies headquartered outside the state but which both have operations in the Land of Enchantment.
SpinLaunch, based in Long Beach, California, has been a tenant at Spaceport America since 2019, where it operates a suborbital accelerator launch system. It ran its first test launch using that system in October 2021.
Mojave, California-based Universal Hydrogen in March 2022 said it plans to invest around $250 million in a manufacturing facility near the Albuquerque International Sunport. While updates on that facility, which could bring hundreds of jobs to New Mexico, have been delayed, the clean aviation company has made recent strides in preparing its hydrogen-powered technology for market.
Nicole Conner, a partner at Airbus Ventures, said during Tuesday's SIC meeting New Mexico is an "obvious location" for its portfolio companies, including SpinLaunch and Universal Hydrogen, to run operations. That's because of the state's aerospace infrastructure, including Spaceport America, she said. Airbus Ventures focuses primarily on investing in aerospace and deep technology companies.
The SIC also committed up to $50 million to Upfront Ventures' eighth fund. While Santa Monica-based Upfront doesn't have existing exposure to New Mexico, Richard Pugmire, a private equity advisor to the Council, said establishing a relationship with Upfront could help New Mexico's startup ecosystem connect more with Los Angeles' startup ecosystem.
Mark Suster, one of Upfront's founding partners, told the SIC Los Angeles has one of the fastest-growing technology ecosystems in the U.S. That's in part because, Suster said, people working in startups and tech in L.A. have focused on community building and "publicly evangelizing" new founders and investors.
Those are skills Upfront, which manages over $2.5 billion in assets, could bring to New Mexico's own tech and startup ecosystem, Suster said.
While not a part of the SIC's New Mexico private equity program, the Council on Tuesday approved an up to $75 million commitment to Bain Capital Life Sciences Fund IV, as well, out of the SIC's venture capital category of its national private equity program, which uses a larger portion of Severance Tax dollars than the New Mexico-focused program. Bain Capital Life Sciences is a part of Bain Capital, a Boston-based investment firm with more than $180 billion in assets under management, making it one of the largest private investment firms in the U.S.
The $75 million commitment to Bain's fourth life sciences fund is notable because it's part of a relatively small chunk of the SIC's overall investments. The Council's venture capital category has only an up to 10% target allocation out of its national private equity program, which sees most of its dollars go to private equity firms focused on company buyouts.
It's also notable because of New Mexico's growing bioscience and life sciences sector. Rio Rancho-based Nature's Toolbox raised the state's largest venture round last year, which totaled $47.5 million, and Santa Fe-based Mercury Bio wants to raise around $20 million this year. Circular Genomics, another bioscience startup based in Albuquerque, pulled in the first investment round announced in 2024, closing an $8.3 million Series A in late January.
The 2024 state budget, currently awaiting Gov. Michelle Lujan Grisham's signature, includes a $73 million appropriation for the SIC. That's an $8 million jump over last year's $65 million SIC appropriation.
