boxgroup Closes $255M in New Funds for Early-Stage Startups

BoxGroup Secures $255 Million to Fuel Early-Stage Startups

For over a decade, BoxGroup has been proactively investing in companies during their initial phases. The firm notably led the first investment round for Plaid, a fintech innovator that was almost acquired by Visa for a substantial sum last year.

A Track Record of Identifying Potential

BoxGroup has consistently demonstrated an ability to recognize promising ventures, often before the companies themselves fully realize their potential. David Tisch attributes the firm’s success to its willingness to provide early support and confidence to founders.

“Securing that initial investment is often the most challenging step for a startup,” Tisch explained to TechCrunch. “It’s the affirmation that someone believes in your vision and is willing to financially support it.” He emphasized that BoxGroup actively seeks to be that crucial “first yes” for as many companies as possible, prioritizing early engagement.

New Funds to Expand Investment Capacity

Today, BoxGroup announced the successful closing of two new funds, collectively totaling $255 million. BoxGroup Five, the firm’s fifth early-stage fund, will focus on pre-seed and seed investments in emerging technology companies.

BoxGroup Strive, the second opportunity fund, will provide follow-on funding to companies already within the BoxGroup portfolio. Each fund is capitalized at $127.5 million.

A Portfolio of Successful Investments

Throughout its history, BoxGroup has completed over 300 investments. These include early-stage backing of companies like Ro, Plaid, Airtable, Workrise, Scopely, Bowery Farms, Ramp, Titan, Warby Parker, ClassPass, Guideline, and Glossier.

The firm has also seen significant returns from exits involving Flatiron Health, PillPack, Matterport, Oscar, Mirror, Bark, Bread, and Trello.

Early Bets Yield Significant Returns

Beyond being the initial investor in Plaid, BoxGroup also provided the first funding to PillPack, which was later sold to Amazon for nearly $1 billion in 2018.

Investment Strategy and Fund Allocation

BoxGroup Five is planned to invest in approximately 40 to 50 new companies annually, with individual investments ranging from $250,000 to $1 million.

“We aim to be a significant, but not necessarily the largest, investor in a funding round,” Tisch stated.

Supporting Companies Through Growth

The opportunity fund will occasionally make later-stage investments, but primarily serves to continue supporting companies in which BoxGroup initially invested. For instance, BoxGroup first invested in id.me back in 2010 and has continued to support its growth.

“This company represents an eleven-year journey to success, and we’ve been a consistent backer throughout that time,” Tisch noted. “It exemplifies our commitment to long-term partnerships.”

Long-Term Commitment to Portfolio Companies

BoxGroup not only pre-seeded digital healthcare startup Ro but also participated in every subsequent funding round, including a recent $500 million raise at a $5 billion valuation.

A Generalist Approach to Investment

Tisch describes the BoxGroup team of six as “generalists,” investing across a diverse range of sectors. Their portfolio includes startups in consumer technology, enterprise solutions, fintech, healthcare, marketplaces, synthetic biology, and climate technology.

Evolution of Funding Sources

BoxGroup’s previous fund closures, totaling $165 million, marked the first time the firm had accepted external capital in nine years. Previously, it had relied solely on personal funding from its partners. The firm’s limited partners now consist of endowments, foundations, and family offices.

Prioritizing Founder Relationships

Partner Nimi Katragadda emphasizes that building strong, authentic relationships with founders is central to BoxGroup’s approach. This includes taking risks on founders, even after previous ventures haven’t succeeded, and sometimes investing in ideas and individuals before substantial traction is evident.

“Our interactions must be more than just transactional; they need to be deeply personal,” she said. “We aim to accompany founders on a decade-long journey as they develop their businesses. We are comfortable with the ambiguity of early-stage ventures, accepting assumptions, vision, and nascent products.”

Focus on Founder Qualities

Partner Adam Rothenberg echoes this sentiment, stating: “We strive to be a supportive friend to our founders. We value honesty, constructive criticism, and transparency in our relationships. We concentrate on the ‘how’ – how a founder thinks, builds products, and attracts talent – more than the ‘what.’”

Future Growth and Team Expansion

With offices in San Francisco and New York, BoxGroup anticipates growth in the near future, planning to add “first-line investors” to its team, according to Tisch.

Greg Rosen was recently appointed as a partner at the firm. Rosen initially joined BoxGroup in 2015, spent three years there, then joined Benchmark before returning to BoxGroup in early 2020. He now joins Tisch, Rothenberg, and Katragadda as a partner.

Maintaining Perspective in a Dynamic Market

Despite the current surge in venture capital activity, Tisch believes the firm remains grounded through experience and a long-term perspective.

“There appears to be an unlimited amount of capital available for deployment,” he said. “While we don’t attempt to predict market cycles, we understand that markets fluctuate. Regardless of the current environment, talented and driven individuals will continue to create innovative technology companies. Our role is to identify these founders and make informed partnership decisions for the long term.”