C2 Ventures doesn’t invest in crypto, web3 or consumer companies, and it stays away from Silicon Valley startups. Instead, the Greenwich, Connecticut-based venture firm focuses on disruption in legacy industries. For example, one of its portfolio companies is a robotics startup that cleans commercial bathrooms.
The firm announced today it has closed its second early-stage fund totaling $20 million, and a separate $2.5 million Tributary Fund that will make investments in earlier, pre-seed stage old-economy SaaS and robotics productivity tools.
Fund 2’s LPs include more than 125 investors, including the State of Connecticut through Connecticut Ventures.
This brings C2V’s total assets under management to more than $30 million. The firm has more than 30 portfolio companies, three of which have exited, including Kambr, an airline revenue management SaaS provider that was acquired by Amadeus.
C2V’s general partners are Chris Cunningham and Matt Olivo. Describing C2V’s investment philosophy, Cunningham said “number one, we are not an anti-San Francisco firm, but we don’t invest in the Bay Area. We don’t invest there because it’s generally over saturated. Price points are insane.”
Instead, C2V focuses on flyover states and has made investments in cities like Cleveland, Chicago and Charlotte.
Cunningham also said the firm “runs as fast as possible” away from crypto, NFTs, web3 and consumer companies, and toward the “dirty, dull and dangerous.”
“These are old-economy, legacy industries that are ripe for disruption,” said Cunningham. “They’ve had stagnant productivity. Examples are proptech, insurance tech and the underlying data for the commercial trucking industries.
Some other examples of C2V’s portfolio companies include a robotics startup for construction and software companies for car washes, laundromats and dry cleaning.
“We love these verticals because they’re sitting on billions of dollars of TAM and hundreds of millions of revenue. They’re arguably recession-proof, but they’re not that glamorous, so they get overlooked,” Cunningham said.
So far, this approach is working out for the firm. C2V’s Fund 1, which closed at the end of 2019, has a current IRR of more than 50% and two exits. In less than two years, 15 out of its 19 portfolio companies have either exited or raised major follow-on funding.
Some of Fund 2’s LPs include quarterback Baker Mayfield and his brother Matt, along with founders and tech executives like Brian Adams, Jennifer Prince, Shiven Ramji, Sean Cohen, David Kidder, Ari Paparo, Haroon Mokhtarzada and Mike Murphy, who are all an "operators bench" that helps with technical due diligence and then supports startups after they join C2V’s portfolio.
Cunningham said 30% of Fund 2’s LPs are private individuals and family offices, but 70% have experience operating a tech company.
In a prepared statement, Matt McCooe, chief executive officer of Connecticut Ventures said, "C2V squarely fits our strategy of identifying the best emerging managers in Connecticut committed to supporting and growing our state’s startup ecosystem."
Edit: Post corrected to say that C2 Ventures headquarters is in Greenwich, Connecticut, not New York City.