Indianapolis-based Allos Ventures has announced the first closing of its latest fund, Allos IV. The venture capital firm says the fund will continue its focus on investments in early-stage B2B software companies. Managing Director Don Aquilano says being able to launch a fourth fund is “validation that there’s a true need and a value for equity capital in the Midwest and certainly here in Indiana.”
In an interview with Inside INdiana Business, Aquilano said the continued investment speaks to the tech ecosystem that has developed between the coasts.
“Venture capital doesn’t exist on its own; there has to actually be a true need and it actually has to be an ecosystem that creates value,” Aquilano said. “So, the evolution of the ecosystems in our sort of geographical footprint – and that goes everywhere from Chicago, Detroit down to Nashville, St. Louis to Pittsburgh – all these sort of metro areas have really improved and evolved over the years and they’re creating not only a great source of deal flow for investors like us, but also great ecosystems to grow value.”
Citing regulations from the U.S. Securities and Exchange Commission, Aquilano said the firm could not specify how much it has raised in this first closing. However, an SEC filing from December obtained by our partners at the Indianapolis Business Journal shows Allos plans to raise $75 million for Allos IV, which would be its largest fund to date.
Allos says investors in the new fund include the Indiana Next Level Fund, 50 South Capital in Chicago, and Fishers-based First Internet Bank, as well as several successful tech entrepreneurs and Fortune 500 executives.
Aquilano says the firm will continue to provide Seed and Series A funding to B2B software startups through the Allos IV fund.
“[The startups] can be in health tech, insure tech, fintech, human capital management, even technology-enabled business services. So, those are typically the types of companies we like to invest in. It’s a great ecosystem for entrepreneurs who are actually creating those types of companies and frankly, we’re surrounded by the customers of those ventures as well in the Midwest.”
Allos says it has invested more than 40 companies since its founding in 2010. The firm closed its $52 million Allos III fund in January 2020. Allos also raised $23 million for its first fund and $40 million for its second, according to the IBJ.
Aquilano says another form of validation for Allos is the exit of companies in which it previously invested, such as Lessonly, which was acquired by Seismic in August.
“For most people, they don’t see the success until the exit, but that success is growing every single year and it creates high-paying jobs. It obviously is solving great problems on behalf of their customers and so, we’re surrounded in Indiana by a host of companies that, in future years, you’re going to read about these great exits, but that value is being created right now.”