Doubling down on its B2B strategy, Las Olas VC raises $50M Fund 2
Las OIas Venture Capital, one of South Florida’s homegrown early-stage venture firms, announced the closing of its Fund 2. With this new $50 million fund, LOVC continues its thesis of leading seed-stage financings for B2B software companies, with a particular focus on companies based in Florida and the southeastern United States.
Check sizes are getting bigger in Fund 2, too. The fund seeks to lead seed round sizes of $3 million to $5 million with up to $2.5 million initial checks and plans to reserve additional capital for follow-on investments. LOVC expects to invest in 15 to 20 companies out of this fund and has already closed on its first three investments.
This fundraise follows LOVC’s debut $28.5 million Fund I and together with its other co-investment vehicles brings the firm’s total assets under management to about $100 million, the firm said. South Florida investments include CarePredict, SmartHop, ReloQuest and Plum. Elsewhere in Florida, LOVC was the first-check investor in OneRail, now one of Central Florida’s fastest growing companies. LOVC’s partners are Mark Volchek, Dean Hatton and Nate Vasel.
“Our strategy has begun to prove itself out with the strong performance of our Fund I portfolio, and we are glad that our approach has resonated with our returning limited partners and new investors for this fund. We plan to double down on our existing strategy of taking concentrated lead positions and working closely with exceptional B2B founders,” said Volchek, who founded the firm with Hatton and Paul Tanner in early 2016.
I caught up with Vasel, who joined the firm as an associate in 2016, to learn more about their recent investments and plans for Fund 2.
Fund 2 includes many of LOVC’s existing investors, with many coming in with higher commitments than for Fund 1, as well as new investors, Vasel said. Fund 2 has made three investments so far, including Orlando-based proptech Leasecake, an operating system for lease and location management, and has one term sheet out. LOVC led the seed round for Leasecake, investing $1.5 million in that round, he said, and has a Series A on the runway that LOVC will be participating in as well, said Vasel, who is on Leasecake’s board.
As to other investments in Fund 1, LOVC investors participated in SmartHop’s $30 million Series B round announced earlier this month. “We were the very first investor in SmartHop way back in 2018 when they were essentially idea stage, just two guys and WeWork with some whiteboards and no product or anything launched at that time, and so we really got to grow with them. We helped them think through their initial launch, as well as pivoting into their current business model,” Vasel said.
To date, SmartHop has raised $46 million. SmartHop’s Series A and B rounds attracted great investors who have never invested in Florida before, Vasel said. Those include San Francisco-based Sozo Ventures in the B round. Union Square Ventures, one of the top VC funds in the US, led the A round and participated in the B. “SmartHop today has over 100 employees, up from just the founders when we invested four years ago, and is on a path to be a category leader in the trucking space,” Vasel said.
Though LOVC’s focus is early-stage companies, its investors will follow on in later rounds for existing portfolio companies. With Fund 2, “we’re very much focused on B2B software in particular, that’s operationally what Mark and Dean know as founders themselves, and that’s where we spent a lot of time adding value to founders in that space,” Vasel said.
He explained that LOVC likes what it calls “vertical software,” that is companies focused on building products that solve a specific industry problem, such as the logistics problem SmartHop is solving for the independent trucker and the problem Leasecake solves for commercial real estate tenants. The other area of interest, he said, is what LOVC calls “knowledge worker tools,” companies that typically sell to users directly to improve workflow in a very meaningful way and then they expand organically within organizations. Atlanta-based Cypress is a notable portfolio company in this area.
LOVC has expanded the team with two associates hired last summer [full team is pictured above]. The firm is now in the market for a funds controller and will be expanding further to support the growth of Fund 2 as it seeks out more founders to fund.
“We’re looking to partner with exceptional B2B founders. Florida continues to be a key area of focus for us, especially given Miami’s tech growth that’s happened over the last two years or so, which has been awesome,” said Vasel. “We love supporting the local ecosystem.”
Follow Nancy Dahlberg on Twitter @ndahlberg and email her at [email protected]
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