Austin-based holding company BuildGroup said Tuesday it has raised a $330 million fund to make long-term investments in software companies.
Founded in 2015 by Rackspace alums Lanham Napier, Jim Curry and Klee Kleber, along with Pete Freeland from General Catalyst, the company plans to use the capital to back 10 startups over the next five years.
Napier, who is BuildGroup CEO, said the company was designed as a holding company instead of a venture capital fund to free entrepreneurs from the threat of a quick exit.
Having a core group of investors throughout the life of the company means founders don’t have to worry about about raising another round of funding, and can focus on products and customers, he said.
“Venture capital works for some but not for all,” Napier said. “Five-year horizons are designed for growth at all costs and quick exits. We provide permanent capital from aligned investors who really get it, which means no forced exits.”
BuildGroup did not disclose its investors, but a news release described them as “successful entrepreneurs and business leaders from Texas and the Rocky Mountains, with the founders contributing a significant portion of the overall funds.”
The company said it has already invested $57 million across four investments: government app maker CSDC Inc., Python data science platform Anaconda Inc., cloud-based computerized maintenance management system Fiix Inc., and applied science and strategy consultancy Valkyrie Intelligence LLC.
“All of them are tackling large, complicated problems for Fortune 1000 organizations and government agencies, spanning everything from new approaches to sustainability to navigating heavily regulated industries,” the company said.
BuildGroup is the third fund raised by Austin investors in recent months. In May, Silverton Partners announced it closed a new $108 million venture capital fund.
Silverton, founded in 2006, focuses on early stage companies. Since its launch, the firm has made more than 50 investments in the enterprise and consumer technology categories.
Meanwhile, this month Trust Ventures said it has raised an initial $35 million to invest in startups facing public policy barriers. The fund will pursue investments across transportation, energy, finance, insurance, healthcare and other industries.
Trust’s backers include Koch Disruptive Technologies, a subsidiary of Koch Industries Inc.
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