For Chicago-based Hyde Park Venture Partners (HPVP), the mid-continent is anything but flyover country — and its investors seem to agree.
The firm announced Wednesday it raised a $100 million third fund to continue investing in early-stage startups in Chicago and beyond.
The fund, which exceeded its $75 million target, is backed by institutional investors including Richard King Mellon Foundation, Renaissance Venture Capital and the Illinois Growth and Innovation Fund, as well as repeat investors.
Investments from HPVP’s first $25 million fund and second $65 million fund went to startups including local success stories ShipBob, FourKites and G2, as well as Atlanta-based Terminus and Cincinnati-based VNDLY.
“We are pretty flexible to different industries and see a lot of different opportunities across them in the Midwest,” HPVP partner Guy Turner told Built In.
Since those initial investments, G2 closed a $55 million Series C, FourKites secured a $50 million Series C and ShipBob brought in $40 million. HPVP says its companies collectively have raised more than $730 million in follow-on financing from big-name investors including Accel and Bain Capital Ventures.
To date, HPVP has added more than 60 companies to its portfolio and seen around 10 exits, Turner said. And while its hunt for promising startups has expanded into places like Toronto and Indiana’s SaaS-heavy market, it’s remained plugged into the Chicago ecosystem. About two-thirds of its first fund went to Chicago-based companies, and half of its second fund did, too.
With its newly raised third fund, the company will continue to keep an eye on industries with a robust Chicago presence, such as logistics, food and fintech, Turner said.
Having locked in a strategy for bringing strong talent and scalability to fledgling startups, HPVP is not looking to shift its focus to growth-stage companies at any point. In fact, Turner said it’s found the ever-expanding presence of tech economy products in limited partners’ homes and offices has made it easier to communicate the potential of seed-stage tech startups.
“There’s a higher willingness to try things sooner and faster and to experiment,” he said. “All of us are consumers, and we all use Uber, right? I think once you go through the process of Uber-ification, you realize, oh wow. A pretty young company can have a huge impact on things very quickly.”
HPVP identifies promising startups, Turner said, by taking meetings with entrepreneurs of all stripes. By sitting down with everyone from new graduates to accomplished founders to corporate types, Turner said the firm achieves a high level of visibility into the market. The company calculated it meets with 90 percent of mid-continent companies that end up receiving venture funding.
“We have built a real differentiation in our ability to get out into the Midwest and find all the opportunities that are interesting by playing a close ground game and spending time on the ground in the five or six cities that matter.”