Homebrew raises $85 mln in capital for seed and growth deals

Almost exactly two years ago, San Francisco-based Homebrew began investing its maiden fund with $35 million of seed capital. Last Friday, it unveiled a big increase in firepower: $85 million in new money split between a second seed fund and a follow-on fund for primarily B rounds deals.

In a blog post, the two-investor firm led by partners Hunter Walk and Satya Patel said it raised $50 million for Homebrew II and $35 million for Moonshine.

“In this funding environment, for both companies and VCs, there’s a temptation to maximize how much capital you raise,” according to the blog post. “We raised less than we could have, but as much as we wanted, given our strategy and approach.”

The roughly 2.4x increase in capital and the rapid return to fundraising is in keeping with the phase of the up-cycle the industry is in. Homebrew is not alone in asking LPs to pony up more money at a faster pace.

What’s interesting is its intent to deploy seed dollars at a speed similar to its first fund. The new fund is “slightly larger than our first fund because we intend to deploy entry capital over a 30 (to) 36 month period, whereas we invested the initial fund in 24 months,” the firm said.

Initial check size will typically be between $500,000 and $1 million as part of a $1 million to $3 million funding, not unusual for a Silicon Valley seed deal these days.

The firm said it hopes to play a “leadership role in first institutional financings.”

The big departure is Moonshine. Moonshine lets Homebrew extend support for portfolio companies primarily to Series B rounds and beyond. Homebrew didn’t have a scale-up fund before.

The firm has invested in 17 companies in its two years. Among them are Shyp, Pillow and Nuzzel.

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