Tercera launches today as an investment and advisory firm with $225 million in capital to focus on early-growth deals in companies specializing in professional services.
Its backers include individuals investors and Trilantic North America, a private equity firm that manages $9.7 billion in capital and which is the primary investor. Although it sounds unusual for a PE firm to be the backer of a venture growth firm, Tercera founder and CEO Chris Barbin tells Venture Capital Journal that Trilantic is not so much a limited partner but a capital partner providing funds that Tercera will use to invest.
The relationship is similar to another partnership Trilantic formed with Sunrise Strategic Partners, a Boulder, Colorado firm founded more than four years ago that provides growth capital and expertise to emerging consumer brands in the sustainable living space.
Barbin said Trilantic and Tercera came together because they share a similar thesis. For Tercera, this thesis involves investing $5 million to $25 million in early-growth companies that represent the next generation of cloud professional services companies. Specifically, the firm will focus on companies in analytics, automation, data, security, enablement and the management of cloud technology.
Barbin founded and was CEO of Appirio, an IT company that provided cloud technology services and was among the first enterprise services partners of Salesforce, Google, Workday and AWS. Wipro Technologies acquired Appirio for $500 million in 2016.
Two years after that, Barbin joined GGV Capital as a venture partner. During his time at the firm, he focused on cloud computing and professional services.
Harkening back to Appirio, Tercera is seeking to help services companies achieve similar success in a market segment that Barbin believes has been historically neglected by other venture firms.
“We love the space,” he says. “Software may be eating the world, but you can’t have software without people.”
A virtual firm
He says the firm has already invested in its first deal, which he expects to be announced in a couple of weeks. He expects Tercera’s will generally be the first money into the companies the firm partners with, which he describes as founder-led, growth-focused and cloud-driven.
Tercera is the Spanish word for third, and Barbin says the name is a reference to the third wave of information technology and how businesses today rely on cloud computing.
Barbin is based in Chicago, while partner Dan Lascell is in Boston and principal Lisa Burton is in Minneapolis. Barbin says the firm will remain virtual with no office.