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Texas-focused LiveOak Venture Partners raises $105 mln second fund

LiveOak Venture Partners, whose three founding partners all have ties to the former Austin Ventures, closed its second fund at an oversubscribed $105 million.

The Austin firm, founded by Partners Ben Scott, Krishna Srinivasan and Venu Shamapant, closed its inaugural fund in 2014 at $109 million.

The firm didn’t disclose LPs in its sophomore effort, but Fund I backers included Teacher Retirement System of Texas.

Shamapant told VCJ that more than 90 percent of the investors in Fund I came back for the second fund and that the LP base consists of large pensions, university endowments, family offices and some local individual investors.

The three partners met in 2000 at Austin Ventures, which was one of the largest early-stage investors nationwide. But AV transitioned into more of a growth-stage investor and raised its last fund, at $900 million, more than a decade ago.

The firm focuses on what it call a red-hot Texas investment scene, and it notes it has 20 years of investing experience, from Austin Ventures and LiveOak, of backing entrepreneurs in the Lone Star State.

Srinivasan said that about two-thirds of the fund is invested in Austin, followed by Dallas, Houston and San Antonio. “We look for great companies in Texas,” said Srinivasan, who added that there’s no shortage of deal flow.

He and Shamapant said several qualities of the state make it an ideal market: migration of talented tech pros into the state; lots of repeat entrepreneurs; more corporates like Apple and Google establishing presences there; and plenty of capital to seed firms and syndicate with on deals.

LiveOak aims to be the first institutional money into a company, and typical initial investment is $1.5 million to $4 million.

Fund II has already backed six companies, including four disclosed investments: Austin startups Eventador, Osano and Rollick, and Dallas-based AmplifAI.

Since LiveOak was founded more than six years ago, the firm has led or co-led 24 investments in tech and tech-enabled services that have gone on to raise more than $400 million since LiveOak’s initial investment. The partners expect a similar number of investments in Fund II.

Portfolio companies include recent exits such as Digital Pharmacist, which was acquired by K1 Investment Management for more than $100 million, and Opcity, which News Corp bought for $210 million.