As the year comes to a close, early-stage venture capital investment continues its slowdown, according to data from Crunchbase. However, BoxGroup is one VC firm that is keeping the investment train rolling.
TechCrunch learned exclusively that the firm, based in New York and San Francisco, quietly closed on $425 million in capital commitments across two new funds: BoxGroup Six, a pre-seed and seed-stage fund, and BoxGroup Picks, its third opportunity fund. Each fund is $212.5 million, partner David Tisch said.
The 13-year-old firm has made investments in companies like Ramp, Warp, Hex, Solugen, Vial, Arcadia, Nourish, Coast, Turquoise Health and Backbone.
Tisch describes BoxGroup as a generalist firm investing in five “buckets”: consumer enterprise, healthcare, financial, biotech and climate. The four partners have worked together for the better part of a decade, and they recently brought in two new associates to make it an eight-person firm.
The new funds come two years after BoxGroup raised $255 million for its fifth early-stage fund and second opportunity fund. The sixth early-stage fund is almost double the fifth one, Tisch notes.
“For our early-stage fund, we grew, which in this environment, is of note,” Tisch said. “In fact, it’s a pretty significant growth of the early-stage fund. In doing that, we were able to bring in a handful of new partners that we’re really excited about, including a handful of large institutional LPs that joined the group this time.”
BoxGroup invests at the earliest stages — pre-seed, seed and Series A, often leading a pre-seed round. Similar to previous funds, Tisch expects to inject capital from the new funds into 40 to 50 new startups, writing check sizes between $500,000 and $1 million.
At the core of BoxGroup’s investments are first-time founders. However, Tisch said lately the firm has had conversations with second- and third-time founders, including many that it had not backed before.
Tisch says one of the reasons for the slowdown in investments this year was that pace of company creation, saying it was “dramatically lower than at any point in my 14-year career, down upwards of 75%.”
“You can see some of that in the macro numbers around venture and funding, but we were really seeing it and feeling it,” Tisch said. “If we look back at the timing of our last raise to now, when we were raising in 2021, the market was crazy. Over the past six months, we’ve seen a return to what I would say is normalcy. It’s more like the 2018, 2019 market.”
He also notes that “it’s an exciting time to be investing at the early stage,” for a couple of reasons. For one, artificial intelligence is reigniting investments. Two, founders are aware that the fundraising market is not easy, so they are starting companies “with more intention and thought around the opportunities going on out there.”