Liveoak Venture Partners Raises $210M for Texas Startups

LiveOak Venture Partners Secures $210 Million Fund III

LiveOak Venture Partners has successfully closed its largest fund yet, totaling $210 million for Fund III. This substantial capital injection will empower the Austin-based early-stage venture capital firm to significantly increase its investment in entrepreneurs based in Texas.

Fund Oversubscription and Rapid Closure

The fund exceeded its initial target of $150 million to $200 million, demonstrating strong investor confidence. Notably, the fundraising process was completed in under four months, as stated by co-founder and partner Krishna Srinivasan during an interview.

Fund III elevates LiveOak’s total assets under management to approximately $500 million.

Investor Base and Diversity

Srinivasan highlighted the efficiency of the fundraising process, noting it occurred entirely through virtual meetings. He also indicated the potential to have secured even greater funding.

The investor base is characterized by its diversity, comprising 90% institutional investors and over 40% new investors.

Backer Composition

The fund’s backers include a wide range of entities, such as:

• Pension funds
• University endowments
• Foundations
• Prominent family offices
• Local Austin entrepreneurs
• Founders and executives from existing LiveOak portfolio companies

Firm History and Investment Strategy

Founded in 2012 by Srinivasan and Venu Shamapant, LiveOak previously raised $105 million for each of its first two funds.

The firm concentrates its investments in technology companies located across major Texas cities – Austin, Houston, Dallas, and San Antonio. To date, they have invested in 49 companies and plan to add another 25 to 30 with the new fund.

Initial investments typically range from $1 million to $5 million, with a projected total investment of around $10 million throughout a company’s growth trajectory.

Portfolio Successes

Companies backed by LiveOak have collectively raised over $1 billion in funding.

Notable examples include Disco, a legal tech company that went public in July with a $3 billion valuation, and Homeward, which secured $371 million in debt and equity financing in May, achieving a $1 billion valuation.

Texas Venture Funding Landscape

LiveOak positions Fund III as the largest Texas-focused, early-stage venture fund established in the last decade, coinciding with a period of record-high funding for Texas-based companies.

According to Crunchbase data, over $90 billion has been invested in Texas companies since 2016.

Investment activity reached $14.2 billion in 2021, and is projected to surpass the $15.4 billion invested throughout all of 2020.

A significant recent investment occurred this month with Austin-based ZenBusiness, which raised $200 million in a funding round led by Oak HC/FT.

Future Outlook

Shamapant expressed enthusiasm for the current Texas market, stating, “The Texas market is an exciting place right now.”

He affirmed the firm’s strong belief in the state’s potential, which is now gaining wider recognition, contributing positively to their fundraising efforts. The firm’s success validates its investment strategy and its effectiveness.