Work-Bench Launches $100M Fund for Enterprise Startups

NYC's Work-Bench Announces $100 Million Fund for Early-Stage Enterprise Startups

Despite the challenges presented by the recent pandemic, New York City continues to function as a major hub for commerce and business activity. Over the past ten years, a thriving startup ecosystem has emerged within the city.

Work-Bench's Focus on Enterprise Seed Investments

This morning, Work-Bench, a venture capital firm based in NYC specializing in early-stage enterprise seed investments, revealed the launch of its $100 million Fund 3.

Founded in 2013, at a time when investment capital was largely concentrated in Silicon Valley, Work-Bench was established by Jonathan Lehr and Jessica Lin. They envisioned a firm dedicated to providing initial funding to enterprise startups within New York City.

The founding team possessed a strong understanding of information technology and recognized the potential of leveraging the city’s high concentration of Fortune 500 companies.

Successful Investments and Exits

This strategic approach has proven highly successful, resulting in investments in prominent startups such as Cockroach Labs, Catalyst, Dialpad, and FireHydrant. These companies have received coverage from TechCrunch.

Notable exits include CoreOs, which was acquired by Red Hat in 2018 for $250 million.

Leveraging a Corporate Network

In a blog post announcing the new fund, Lehr and Lin explained that their initial concept has surpassed their early expectations. They stated, “Our extensive corporate network, comprised of Fortune 500 customers in NYC, allows us to gain confidence in companies at an early stage, even before they meet the standard metrics required by other VC firms.”

“Furthermore, this customer network facilitates securing crucial initial client engagements. Through our community events and established playbooks, we foster valuable knowledge exchange,” the founders added.

Continued Focus on New York City

Lehr emphasized that, despite the potential for broader reach enabled by the pandemic, the company remains primarily focused on NYC. The majority of their investments will continue to be made within the city.

“Interestingly, while businesses transitioned to virtual operations, the pandemic actually reinforced our commitment to New York City. The city experienced the initial and most severe impact of COVID-19, yet VC funding for local enterprise startups significantly increased during this period.”

“Moreover, the accelerated digital transformation undertaken by numerous Fortune 500 companies in NYC during the pandemic created substantial work and numerous customer opportunities right within our local market,” Lehr explained.

Portfolio Composition and Future Investments

Approximately 70% of the $47 million Fund 2 portfolio was allocated to NYC-based startups, and Lehr anticipates a similar, or even more concentrated, distribution for Fund 3.

Building a Community

Work-Bench has actively cultivated a community by providing workspace within their offices, allowing early-stage companies to collaborate and benefit from shared experiences. This practice was temporarily suspended due to the pandemic.

The founders have also hosted numerous events featuring diverse speakers, organizing hundreds of gatherings before transitioning to virtual formats with the onset of the pandemic.

Commitment to Diversity

As Work-Bench deploys Fund 3, it is prioritizing investments in a more diverse group of founders. Lehr stated, “Currently, 20% of our portfolio consists of women founders. While we are proud of this representation within the enterprise sector, we recognize the potential for significant improvement.”

“We’ve learned that achieving diversity in deal flow requires proactive effort. Therefore, we place a strong emphasis on identifying and amplifying the voices of women and diverse founders during our Investment Committee meetings and throughout the broader VC and enterprise tech community.”

The firm will continue to focus on enterprise startups, particularly those located in New York City, as it allocates these new funds.