SOSV Closes Fund III at $150M

January 6, 2017

SOSV, “the accelerator VC” – a venture capital firm that is a little different in that it owns and operates its own portfolio of accelerators, announced that it has closed its third fund at $150 million.

Over the past 20 years SOSV has grown to be a global fund with $300 million in assets under management that graduates more than 150 companies per year through its accelerator programs, ranking it as the third largest seed investor by volume in the world.

Under the business model of its programs, SOSV accelerators take a stake of between six and twelve percent in startups in exchange for the provision of both financial and intellectual capital, meaning the offering of both seed financing and a framework and community of expertise that helps startups gain the traction needed to accelerate development and secure further funding.

Fund III is in place to provide backing to startups that have graduated from one of SOSV’s eight accelerators that include Food-X, the first international business accelerator designed to launch food-related startups; Indie Bio, the world’s first Synthetic Biology and life science accelerator; and Chinaccelerator, a China-focused program to jump start entrepreneurs developing internet and mobile technology companies.

“There are a lot of really great ideas out there,” Sean O’Sullivan, managing partner with SOSV told Tech Crunch. “But Series A rounds are not happening as easily as they used to. We’re here to get more companies further, faster, and get them to a greater degree of traction and profitability earlier so they can go on to raise those Series A’s.”

Food-X Graduate

One such graduate is New York-based pea protein snack chip startup, Proformance Foods, which GAI News reported this past October raised $1.2 million in a round led by “one of the 10 largest CPG companies in the world.” The company also announced that it has changed its brand name from ProTings to Protes, in response to a dispute with B&G Foods who owns the brand, Original Tings.

Protes was a member of the 2016 cohort chosen by SOSV’s Food-X accelerator. Selected from a field of 300 applicants, Protes (known then as ProTings) was one of 10 startups awarded $50,000 in funding – consisting of $20,000 in cash and a $30,000 convertible loan note in exchange for a stake in the company of between seven and 10 percent.

“We did a small seed round with SOSV a few months earlier and our growth was so strong that a much larger group started conversations soon after for a full Series A,” company co-founder Krik Angacian told AlleyWatch at the time. “We were already cash profitable at that point so we didn’t feel the need to run a full financial raise, but the right partners came along and we decided it was in the best interest of the company to engage with them in negotiations and an eventual deal.”

The Fund and Its Founder

SOSV Fund III has been backed by 65 investors ranging from tech executives, formerly-backed founders, family offices, private foundations and multinational corporations including the IFC of the World Bank, the Lemelson Foundation, The Russell Family Foundation, Austin Hearst, Alex Rigopolous and others.

Part of the appeal of SOSV is not only its mission, but its founder, Sean O’Sullivan. An investor with a history in both tech and business, O’Sullivan was a star on Dragon’s Den – a reality show where entrepreneurs pitch their business to a panel of five multi-millionaire “dragons” who have the option to invest their own capital in chosen ventures.

He also founded MapInfo and NetCentric, two of the first companies to spearhead the technologies that enabled internet street mapping and “cloud computing” according to Tech Crunch.

Other companies to graduate from SOSV’s Food-X accelerator include Memphis Meats, which has gone on to secure funding from New Crop Capital, and Clara Foods which secured $1.7 million in funding in 2015 from David Friedberg, Gary Hirshberg, Ali and Hadi Partovi, Scott Banister, and SOS Ventures to support the development of egg whites made from genetically modified yeast instead of chickens.

Lynda Kiernan

 

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