High Alpha Capital launches $110 million venture fund

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Indianapolis-based High Alpha Capital—the investment arm of venture studio High Alpha and one of the largest software venture capital firms in the Midwest—announced Thursday the closing of a new $110 million fund, its biggest fund to date.

The new fund, High Alpha Capital III, will continue to invest in pre-seed, seed and Series A rounds for tech companies globally.

“This will be the largest fund in Indiana and one of the largest venture funds in the entire Midwest,” Drew Beechler, marketing director for High Alpha, told IBJ.

High Alpha Capital has raised more than $215 million across three funds since it was founded in 2015.

“High Alpha Capital III provides us with an incredible opportunity to further our mission of supporting early-stage software entrepreneurs who are shaping the future through technology,” High Alpha Managing Partner Scott Dorsey said in a written statement. “We pride ourselves on bringing entrepreneurial empathy and an operator’s mindset to each portfolio company that our team is privileged to support.”

High Alpha Capital III made its first investment last month by leading an $8 million Series A round in Rheaply, a Chicago-based asset management platform. Rheaply CEO Gary Cooper was recently named to the Forbes Next 1000, a recognition for up-and-coming entrepreneurs, and the company won the Rise of the Rest Virtual Tour: Equity Edition competition.

The new fund announcement builds on recent momentum across the High Alpha investment portfolio, including funding rounds for SalesLoft and Attentive that resulted in $1 billion-plus valuations for each company.

High Alpha announced in 2018 that it secured $85 million for its High Alpha Capital II, a seed and Series A venture fund, and $16.7 million for its High Alpha Studio II, an enterprise-startup studio focusing on software-as-a-service companies.

Previous investments have been made in companies such as Attentive, SalesLoft, Zylo, Terminus, The Mom Project, Lesson.ly, LogicGate, MetaCX, Socio and more.

The new venture fund is affiliated with High Alpha Studio, which co-founds and launches new software companies. The venture studio launched a company record 10 new firms in 2020 and has started 28 companies overall. Recent software company launches include Mandolin, Bolster, Filo, Trava and Shaker.

High Alpha unveiled its first new launch of 2021 in February, when Luma, which makes and markets software that helps companies with the interview and hiring process, officially took flight.

Luma is headquartered in the Bottleworks District downtown and is led by co-founder and CEO Grace Tyson—a former sales leader at San Francisco-based Chorus.ai, which bills itself as a conversation intelligence platform.

High Alpha recently completed a new 42,000-square-foot office and community space in the Bottleworks District, which company investors hope to become a primary hub for entrepreneurship in the Midwest.

Last year was a remarkable year for High Alpha, and officials told IBJ it has several companies that have been incorporated but are still operating in stealth mode.

Additionally, High Alpha Innovation, a recent spin-out, announced in January a new program to help immigrants launch companies in the U.S.

And earlier this month, High Alpha announced that for the first time, High Alpha is opening up its proprietary Sprint Week process—which has led to the launch of many of its portfolio companies—more broadly to aspiring founders and entrepreneurs. The event is scheduled for May.

The growth explosion at High Alpha comes as startup launches nationally were down dramatically in 2020.

High Alpha officials said while they laid much of the groundwork for the 2020 growth in 2019, even they were surprised by the number of companies the venture studio launched during the pandemic. Much of the credit, said High Alpha Partner Kristian Andersen, goes to one of the firm’s startups, Filo, which was unveiled in December.

Filo’s software, explained Andersen, was the engine for much of the work on startups that was done by High Alpha and its partners during the pandemic lockdown.

Filo—which has eight employees and makes and markets a virtual meeting space for teams, workshops, programs and events—has already signed deals with more than 20 customers, including the renowned TechStars accelerator, which is using Filo’s software nationally.

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