betaworks ventures is a not-so-new $50 million early-stage fund
betaworks, the startup studio responsible for companies like Giphy, TweetDeck, and Dots, is today formally announcing the launch of a $50 million early-stage fund called betaworks ventures.
betaworks ventures has actually been active in the market for the last year, though operating somewhat under the radar, and betaworks has been making investments long before that from the over-arching betaworks holding company. The $50 million fund allows betaworks to invest across all three of its main interests, including betaworks studio (the arm that launches home-made companies), betaworks camps (theme-based accelerators) and external investment (outside companies).
Borthwick explained to TechCrunch the way that betaworks ventures will divvy up resources across all three divisions of the company.
Like everything betaworks does, the fund will be focused specifically on a few categories of technology, including conversational interfaces, spatial computing, native media, playable media, and emergent behavior in legacy systems.
In terms of number of companies, the majority of investments will go toward companies launching out of betaworks camps — previous camps include BotCamp and VoiceCamp — while a relatively small number of investments will go toward studio companies, as only two or three launch each year. Outside investments will fall somewhere in the middle.
That said, the actual amount of cash will break down a bit differently, with outside investments seeing around 50 percent of the fund’s investment capital. Studio companies will receive larger investments, taking up about 25 percent of capital, with a large number of small seed and pre-seed investments going to camp graduates.
Partners in the fund include betaworks boss John Borthwick, Matt Hartman, and Peter Rojas. betaworks ventures will also benefit from a fellowship program, letting folks from the betaworks community scout startups that may be of interest to the fund. Those fellows will receive a share of the economics on deals they bring in, but not of the fund as a whole.
Though the fund is focused on pre-seed and seed stage funding, the new structure of betaworks as a whole will allow for more flexibility for Series A, Series B, and follow-on rounds.
“Our ability to do follow-ons was so restricted,” said Borthwick. “Giphy grew extraordinarily fast, along with some others, and we couldn’t double down as those things grew up because our source of capital was exclusively through the holding company.”
Borthwick said he’s mulled starting a fund for the past five or six years, but last year he eventually put his foot down and made it happen.
We reported on the story last year, and though Borthwick wouldn’t confirm or deny whether Twitter invested in the fund, he did confirm that both the New York Times Company and Guardian Media Group have joined as LPs.
To date, betaworks ventures has made around 30 investments from the fund.