.406 Ventures, a 10-year-old, Boston-based venture firm that focuses exclusively on enterprise-related opportunities, has closed its third fund with $217 million. The total is slightly more than the firm assembled for its first two funds, closed in 2006 and 2011, respectively, with $169 million and $175 million.
That’s by design, says senior associate Payal Agrawal Divakaran, who joined the firm five weeks ago, after nabbing a degree from Harvard Business School. “The goal is to invest in roughly 20 companies in each fund, through initial checks of between $2 million and $5 million,” with some multiple of that reserved for follow-on funding, she says.
.406 Ventures was founded by three partners: Maria Cirino, who co-founded the managed-security services company Guardent (which VeriSign acquired in 2003 for $140 million); former Razorfish CFO Larry Begley; and Liam Donohue, founder of Boston venture firm Arcadia Partners.
The firm has gone on to build an interesting portfolio, with at least three companies that are currently IPO candidates. Those are the Burlington, Ma.-based cyber security company Veracode, which filed to go public in May; Boston-based Bit9, another cyber security company; and the New York-based open source video platform Kaltura.
.406 Ventures also saw an exit in the 2013 sale of Mashery – a manager of APIs that allowed public-facing companies to make their services accessible to remote device users — to Intel for a reported $180 million.
Some of the firm’s newest investments include Axial Healthcare, a three-year-old, Nashville, Tn.-based company whose cloud-based data and analytics platform aims to help manage the cost and quality of patient care; and Iora Health, a Cambridge, Mass.-based private health care company that pairs every patient with a personal physician, as well as a “personal health coach” who stays in close contact during and between office visits.
.406 Ventures, which focuses primarily on the eastern half of the U.S. (that’s mostly where its network is) tends toward the apprentice model of bringing in junior partners and developing them. In addition to Cirino, Begley and Donahoe, it counts among its partners Greg Dracon and Graham Brooks who joined in 2007.