Bullpen Capital raises nearly $140 mln to continue post-seed investing

San Francisco-based Bullpen Capital has raised an oversubscribed $140 million fourth venture fund to continue its thesis of investing in companies at the post-seed stage.

The firm is also introducing a one-time “playoff” fund to make pro-rata investments in portfolio companies from its first three funds.

Fund IV, which was targeted at $125 million, closed at $139.5 million, according to General Partner Paul Martino. The playoff fund sought $40 million according to a regulatory filing filed in March. Martino declined to comment on the status of the playoff fund.

In addition to Martino, the firm’s investment team includes General Partners Duncan Davidson and Eric Weisen. Bullpen launched in 2010.

Martino declined to name any new investors, but said that about 80 percent of the fund’s value is from about 12 institutions, including family offices, family endowments, health systems, and funds of funds, while the remainder of the fund is backed by friends, family and CEOs. He said no pensions had invested.

The firm’s playoff fund is its “first and only,” since Fund IV is large enough to hold enough dry powder in reserve to avoid pro-rata drop off, Martino said. The playoff fund has backed e-commerce site Grove Collaborative, a Fund III portfolio company, which in January raised $35 million for its Series C round.

As for Fund IV, its first investment is expected to close this week, and a second is expected next week, Martino said. One deal is in the sports betting sector, and the other is in an HR platform, two sectors where the firm has previously invested. The firm invested in online fantasy football site FanDuel and HR software site Namely out of Fund I.

Bullpen plans to invest in 25 companies from Fund IV, with an average initial check size of about $2 million, Martino said. It aims to lead most of its deals, but is “not religious” about leading deals.

Although the two funds were raised at about the same there is no requirement that LPs must invest in both, Martino said.

“We learned from hearing many times from LPs they hate funds being stapled together,” he said. “We have LPs who are in both [funds], or one or the other.”

The firm also has no plans to change its investment thesis. “On day one of year nine, we’re doing exactly what we did on day zero,” Martino said. “The post-seed thesis is what we’ve done since the beginning.”

It will also stick to its “contrarian” view of the markets, and won’t seek out investments in the artificial intelligence or cryptocurrency sectors, even while other firms are racing to get in on those deals.

That being said, the new fund’s limited partner agreement allows it to hold cryptocurrencies and digital tokens, and the firm also had to modify Fund III’s documents to do so. Online gaming marketplace Gameflip, a Fund III portfolio company, held an ICO in January.

“Not that we’re going to do every ICO round,” Martino said, “but we don’t want to be hamstrung.”

The firm doesn’t plan to hire any additional partners in the near-term, but it plans to grow its ranks of analysts and principals toward the end of Fund IV’s lifetime.

“For Fund V, there will be some new faces,” Martino said.