Blue Delta Capital Partners will soon begin investing from a third venture capital fund that quickly raised $215 million, executives said Wednesday.
The McLean venture capital firm closed the new fund, dubbed Blue Delta Capital Fund III, after gaining investments from what executives described as “market-leading institutional investors” and quickly hitting its market cap.
The firm, which makes noncontrolling ownership investments in government contractors in the D.C. area, will utilize Blue Delta Capital Fund III to offer equity funding of $10 million-$50 million for growth-stage support to new companies it is targeting, the company's executives said in a statement. Blue Delta has made 21 investments since it was founded in 2009.
“Raising Fund III in a matter of weeks, and with only one closing, enables us to spend more time working with our existing portfolio companies and partnering with new industry-leading federal companies in 2022 and beyond,” said Blue Delta Capital Partners general partner Mark Frantz.
The raise for Blue Delta Capital Fund III comes two years after the firm announced Blue Delta Capital Fund II, which exceeded expectations with a raise of $150 million instead of its $125 million ceiling target.
Blue Delta Capital Partners has shepherded a number of companies it has invested in to big mergers and acquisitions deals, such as the sale of The Tauri Group to LMI and that of 42Six Solutions LLC of Columbia, Maryland to General Dynamics Information Technology, a business unit of General Dynamics Corp. (NYSE: GD).
In November 2020, the firm saw one of the companies it invested in, Metis Solutions LLC, get acquired by PAE Inc. for $92 million before the latter itself was purchased by Amentum nearly a year later for $1.9 billion. Another firm backed by Blue Delta, IST Research Corp., got acquired in February by The Carlyle Group Inc. and merged with Two Six Labs LLC to form Two Six Technologies Inc.
Blue Delta general partner Phil Nolan said in a statement that the firm’s investment strategy has allowed it to position its portfolio companies to both innovate and capitalize on the opportunities in the federal market.
“Our Silicon Valley-like approach to providing significant stock option grants for those management teams aligns our incentives with theirs, enabling them to create life-changing outcomes for their employees, and helps our companies attract the best talent in the market, many of whom have worked with us in the past,” he said.
Cooley LLP served as fund counsel to Blue Delta on the raise.
