Chicago’s Origin Ventures just closed its biggest fund yet with $130 million in commitments


Image Credits: Origin Ventures

Origin Ventures, the 22-year-old, early-stage, Chicago-based venture firm, just closed its fifth fund with $130 million in capital commitments, which makes the vehicle the firm’s biggest.

It wasn’t necessarily aiming to break any records, suggests managing partner Jason Heltzer, who says the firm was initially looking to raise $100 million. Still, institutional demand for a bigger piece of the private-company action is driving a lot of firms to raise ever bigger funds, and Origin wasn’t immune to the interest, which grew after some recent exits, including the sale of the restaurant reservation platform Tock earlier this year for $400 million.

We emailed last night with Heltzer to learn a bit more.

TC: What was your pitch to LPs in raising this fund?

JH: We really emphasized our thesis, telling investors we were going to continue to focus on the digital native economy and invest in software and marketplace businesses — both B2B and consumer — solving the unique needs of millennials and Gen Z. Those generations have had three things from a very early age: the internet, a smart phone, and social media [and] the way they live, work, and play is just different than previous generations, and that breeds opportunity for startups.

Then as these generations inevitably age, they accumulate more consumer buying power and more authority in companies, naturally fueling the growth of our investments. Those generations are now more than 50% of our workforce and already command more purchasing power than other generations.

TC: This fund is quite a bit larger than your fourth fund, which closed with $80 million. Any changes to the team?

JH: Since our last fund, we’ve added a managing partner, Alex Meyer, and promoted Scott Stern and Prashant Shukla to partner. We also added two senior associates: Jacquie Marshall Siegmund and Angela Smith. Prashant has relocated from Chicago to Silicon Valley and Scott is relocating from Chicago to the DC Metro area, so we’ll now have partners in all four time zones in the continental U.S., putting our team no more than a 90-minute flight from an elite team working on a disruptive idea.

TC: What size checks will you be writing, and in terms of ownership, how much of a company do you expect in exchange for your checks?

JH: We’ll write checks from $500,000 up to $6 million to lead seed and Series A financings. The larger fund will allow us to lead larger Series A rounds. And we target meaningful ownership with every first check, which translates to 7% to 12% in each deal in this market.

TC: Do you still think that Chicago is overlooked by coastal VCs? That’s been a problem historically.

JH: No. There are too many successes in Chicago to ignore (Grubhub, Cleversafe, G2, Livongo, Cameo, Tovala, Tock, Groupon, ShipBob, and the list goes on). And most top firms have made at least one investment in the Windy City, if not many. That was before COVID, and now there are fewer barriers.

Chicago also remains the best city for venture returns because the lower cost of doing business, lower valuations, and great outcomes.

TC: What are you funding now that maybe wasn’t a theme or an industry — or not a major one — three to five years ago?

JH: We’ve been active in the ‘workplace of the future’ for many years, but emerging themes include the creator economy, Web3, and communities.

TC: Are valuations in Chicago as crazy as elsewhere?

JH: Valuations are historically high just about everywhere, although in the Bay Area it’s magnified. The gap has narrowed in recent years, but it will remain for several reasons. Most of our investing is in other markets; we’ve invested in 18 other metropolitan areas outside of Silicon Valley.

TC: Are you price sensitive? When is a deal too rich for you?

JH: We aim to pay a fair price that is calibrated by the market. The firm has been investing in venture since 1999, and we’ve been through many up and down cycles (yes, there are down cycles in venture). Exits like Grubhub, BacklotCars, and Tock have also taught us that being in a winner when you have conviction is way more important than typical valuation fluctuations in those early rounds.

TC: How many deals is Origin doing each year?

JH: We expect to invest in 22 to24 companies out of this fund, over a three-year timeframe. To date, we’ve made 14 investments, so we’re averaging about 8 new investments a year.

TC: Which of your portfolio companies has raised the most money from you?

JH: Our portfolio companies have raised over $450 million  from growth investors in the last 18 months, including Cameo’s $100 million Series C (total raised: $165 million), Fountain’s Series C (total raised: $119 million),and Tovala’s $30 million Series C (total raised: $69 million). These are also our largest active bets as a firm measured by our capital invested.

More TechCrunch

Ahead of the AI safety summit kicking off in Seoul, South Korea later this week, its co-host the United Kingdom is expanding its own efforts in the field. The AI…

UK opens office in San Francisco to tackle AI risk

Companies are always looking for an edge, and searching for ways to encourage their employees to innovate. One way to do that is by running an internal hackathon around a…

Why companies are turning to internal hackathons

Featured Article

I’m rooting for Melinda French Gates to fix tech’s broken ‘brilliant jerk’ culture

Women in tech still face a shocking level of mistreatment at work. Melinda French Gates is one of the few working to change that.

13 hours ago
I’m rooting for Melinda French Gates to fix tech’s  broken ‘brilliant jerk’ culture

Blue Origin has successfully completed its NS-25 mission, resuming crewed flights for the first time in nearly two years. The mission brought six tourist crew members to the edge of…

Blue Origin successfully launches its first crewed mission since 2022

Creative Artists Agency (CAA), one of the top entertainment and sports talent agencies, is hoping to be at the forefront of AI protection services for celebrities in Hollywood. With many…

Hollywood agency CAA aims to help stars manage their own AI likenesses

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

3 days ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

3 days ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities