LPs convinced by potential of overlooked US cities as Next Coast races to $130m Fund II close


Next Coast Ventures has wasted no time hauling in capital for its second fund after reaching a $130m final close for the vehicle.

AltAssets revealed in April that the Austin-based firm was already back in the market with its second fund banking on the evolution of Texas’ venture capital industry.

The firm was looking to collect up to $150m for Next Coast Ventures II, well up on the $85m it gathered for its debut vehicle just two years ago.

Next Coast co-founder and managing director Michael Smerklo said, “Next Coast Ventures’ progress is a direct result of the hard work and dedication of the founders in our portfolio.

“We are incredibly grateful that we get to work with the best entrepreneurs in Next Coast markets and are eager to continue serving as high-growth startups’ local champion in these rising innovation hubs.

“We have a lot more work to do before reaching our goal, but are grateful we get to share this milestone with our founders and investors that have made it possible.”

Next Coast said it has nearly doubled the size of both its internal team and its Entrepreneurs Council in the past six months to meet the needs of its portfolio companies as it continues its expansion.

Since July it has added Zaz Floreani to the deal team as a principal, Jonathan Kaplan as chief operating officer and Sarah Puil as entrepreneur-in-residence.

It also added HomeAway co-founder Brian Sharples, RetailMeNot founder Cotter Cunningham and SaaS entrepreneur Julian Castelli to its growing Entrepreneurs Council to mentor and advise its portfolio leadership.

Next Coast announced its first investment out of NCV II in July, leading the $12.5M Series C in Austin-based software review platform TrustRadius.

Next Coast co-founder and managing director Thomas Ball said, “We are very fortunate that our LPs have continued to invest in Next Coast Ventures, we’ve had big goals from the beginning and while we’ve already seen some indicators of success, we plan on continuing to keep our heads down, work hard and do everything we can to serve great entrepreneurs in Austin and other Next Coast markets.

“We have seen incredible growth in these rising innovation hubs since we founded our firm in 2015 and know that cities like Austin will continue to be a prime example of what is possible outside the coasts.”

Five of the largest US tech hubs outside the San Francisco Bay Area have produced a combined quarter-trillion-dollars in exit value over the past ten years, according to research by the Founder Collective.

Austin has become one of the fastest growing startup ecosystems of these ‘Next Coast’ markets, according to the firm, and is on track to reach a two-decade high of venture capital investment by the end of 2019.

Next Coast Ventures’ first fund invested in more than 30 portfolio companies located in markets including Texas, Montana, Utah and Minnesota.

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