Signia Venture Partners has closed its second fund at $85 million to lead early-stage deals in emerging tech startups mostly in and around San Francisco.
For the unfamiliar, Signia is typically the first money in and the lead investor in the companies it backs, writing $1-2 million in seed stage deals or $2-8 million in later stage rounds.
The firm was started in 2012 by Rick Thompson, the founder of Playdom Inc., a social games developer acquired by Disney for a reported $763 million in 2010. Other founding members at Signia include game and adtech industry veterans Ed Cluss, Sunny Dhillon, and Zaw Thet, who are all investment partners in Signia Fund II.
Thet said that Signia partners have been especially interested in artificial intelligence, computer vision, education tech, and new business models or technologies that will give rise to the next generation of media companies, and other apps that take advantage of augmented- and virtual-reality.
Signia’s portfolio has most famously included Cruise Automation, the self-driving vehicle tech startup which sold to GM in a blockbuster deal valued at more than $1 billion.
And Signia invested early in: the VR software company 8i that turns videos into hyper realistic 3-D images; Eonite Perception, which makes depth-sensing technology used in virtual reality headsets; Super Evil Megacorp, creators of Vainglory, the mobile game; and the bulk, e-commerce marketplace Boxed.
As is typical in venture capital, Signia’s first fund included its cofounders’ own money, and money from family offices, high net worth individuals and strategic backers, in this case, in media and entertainment.
Its second fund includes institutional investors, Thet confirmed. While he did not have permission to name Signia’s new limited partners, the investor said they ranged from large endowments that focus on children’s education, to tech conglomerates.
According to Thet, Signia’s investing partners (including himself) retained major stakes in Signia Fund II, which they believe align the firm’s interest with those of limited partners and portfolio company founders.
As to why the firm remains focused on seed through Series A stage deals, and Silicon Valley, Thet said:
“Valuations are not as heady as they were even a year ago. And it’s getting easier to find and retain talent. But at the same time, traditional Sandhill Road shops have moved away from these deals because their funds have gotten bigger.”
Signia partners aim to work in a very hands-on way with the companies they back, and as such, the firm only does about 8 deals a year, Thet said. That’s the same pace they plan moving forward, despite the larger fund.
The firm shared more about their investment philosophy in a company blog post here.
Thet suggested that founders pitching the firm should demonstrate more than a good net promoter score or growth in active users.
“A lot of entrepreneurs will talk about the features of a product they built and metrics… But we also need to know why now, what’s the opportunity to create a really amazing company that couldn’t exist before,” Thet said. “Long-range vision matters.”