A local venture capital firm has wrapped up a new multimillion-dollar fund that will allow it to scale its investments in hypergrowth early-scale startups.
Over-the-Rhine-based Refinery Ventures officially closed its fund II in December at nearly $37 million, managing partner Tim Schigel said.
The total, slightly above its initial target of $35 million, is more than double Refinery’s inaugural $15 million fund I, which closed in 2018 and was used to invest in nine companies, including Cincinnati’s Astronomer and Halo Health, a health care tech firm acquired this fall by Houston-based Symplr, one of two early exits it celebrated.
Refinery plans to make larger first-check commitments with fund II, between $2 million to $3 million. The goal, Schigel said, is to make 10-12 investments overall — four already been made with a fifth one pending — putting the firm on pace to exhaust its new capital by the end of 2022.
Refinery’s sweet spot is post-seed startups in the enterprise software-as-a-service, or SaaS, space in fields like IT, human capital, digital health and media and marketing.
“We’re not changing anything,” Schigel told me. “We’ve achieved a very high hit rate in terms of getting companies at this inflection point between seed and having great follow-on investors; and big funds are coming in after us. It provides a lot of great evidence that we can keep doing what we’re doing.”
Schigel launched Refinery in 2017 after serving as a founding member of local startup catalyst group Cintrifuse. The firm also maintains headquarters at Over-the-Rhine’s Union Hall.
Cintrifuse has joined as a new institutional investor for fund II, a boon Cincy Inno first reported on last year. Schigel said Western and Southern Financial, Great American Insurance and the Cleveland Foundation also participated.
Refinery Ventures also added new venture partners over the past year:
- Dale Fuller, a longtime software industry veteran who has led several Silicon Valley companies
- Trishan Arul, a San Francisco-based digital health tech veteran
- Justin Deja, who heads new ventures at Cincinnati’s 84.51.
The firm additionally formed a strategic partnership with One Defense, a Washington, D.C., firm that accelerates non-traditional tech into the aerospace, defense and government services spaces, adding Stephen Rodriguez as a VP. Refinery has invested in dual-use technologies including Edgybees and Vantage Robotics.
“All the right things are in place,” Schigel said.
Most recently, Refinery invested in RedCircle, a podcasting startup that raised a $6 million Series A in September; and participated in Toronto-based Tealbook $50 million Series B, months after leading its $5 million “seed plus” round in January 2020.
Both companies maintain Cincinnati footprints.
Schigel hopes to lure even more to the region.
“The No. 1 thing limiting hyper-growth companies is hiring talent," he said. "Hiring and competing for talent in Silicon Valley is hard. One of the things we do with our companies is we help them with that. And oftentimes, we’re steering more people here.”
