Bethesda venture firm SaaS Ventures has raised about $22 million so far for its second fund — but is aiming for about $50 million by early 2021.
And while the spread of Covid-19 and the economic damage it has wrought have thrown many businesses into turmoil, SaaS Ventures co-founder Collin Gutman said the last few months have only strengthened the firm's commitment to investing in manufacturing tech, logistics, security and e-commerce enablement startups.
It hasn't necessarily been easy. While SaaS was able to conduct the fund's first close recently, large institutional investors have been hesitant to invest in funds without in-person visits, which has been less possible in recent months, Gutman said.
“There is so much exogenous risk to fundraising right now, that it's hard to be confident about anything,” Gutman said. “But we feel good right now about things going in a positive direction."
The risks across the broader industry, however, did not stop SaaS Ventures from raising additional money from its existing first fund investors or surpassing its previous fundraising goals.
The firm's first fund of about $20 million in 2017 made more than 50 investments in markets outside of San Francisco and New York, and included a number of local companies. SaaS ventures has invested in D.C. data security firm WireWheel, Ellicott City, Maryland cybersecurity company Huntress Labs and Arlington e-commerce startup Amify.
Huntress Labs has seen “exponential” growth, having seen its revenue climb from $7,000 a month before a small funding round in 2017 to multiple millions of dollars in revenue annually, Gutman said. The company closed an $18 million funding round at a $58 million valuation in February.
SaaS aims to invest in 60 to 70 startups its second time around, and its average investment size will most likely increase from about $175,000 to between $225,000 and $250,000, according to Gutman.
Meanwhile the company’s first fund invested in startups across 23 states and in cooperation with more than 200 funds, a testament to a spirit of venture cooperation he's found prominent in second-tier and third-tier venture markets — unlike in Silicon Valley.
“It’s really been great to validate our thesis and great to see so many partner funds across the country who have welcomed us to be a part of their ecosystem with open arms,” Gutman said.
Gutman is a familiar face in tech circles, having founded enterprise tech-focused accelerator Acceleprise in D.C. and since spread it to Australia, New York and San Francisco. During that time, Acceleprise raised about $10.5 million, according to Crunchbase. Gutman also founded social impact startup WorkAmerica, which raised about $1 million, according to Crunchbase.
The SaaS Ventures team also includes co-founder Brian Gaister, who is also the CEO of private investment firm Pennington Partners. Venture partner and Chief Financial Officer Rodd Macklin is also a co-founder of Pennington Partners.
General partner Seth Shuldiner managed the University of Maryland's angel investor group, Dingman Angels, and previously worked as an analyst for the Maryland Venture Fund.
