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Texas startups will soon have two new sources for capital.

萝莉视频 News has learned that two Austin-based venture capital firms,and , are in the process of each raising $100 million funds.

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The news comes off a period in which the Austin tech scene saw a number of wins. Tech giants Apple and recently committed to expanding their presence in the Texas capital in a big way. And, venture investing in the city is picking up at an impressive pace. In January alone, Austin startups raised nearly as much as was raised in all of the 2018 fourth quarter.

While both firms have different investment strategies, they share some similarities: they鈥檙e both trying to fill what they perceive as an early-stage gap in the Austin market, and they both are naturally bullish on the region.

First let鈥檚 discuss what ATX Seed Ventures has planned.

The firm only just recently closed its second $32 million fund and is already busy raising money for its third fund, which has a target of $100 million. It鈥檚 expecting a first close as soon as May, and a final close later this year.

While that might seem like a big jump, the five-year-old firm鈥檚 partners 鈥� Managing Director , COO , and 鈥� explained to me today that the firm actually has more than $60 million under management so the larger fund size may seem more dramatic than it actually is.

鈥淲e put a significant amount of capital to work outside of our primary fund with co-investments鈥�.鈥� Shonk said. 鈥淏ut we鈥檙e excited to have investors not just doubling down, but tripling down. It鈥檚 a strong sign of investor confidence.鈥�

ATX Seed Ventures launched its first fund at SXSW 2014 in which it deployed $17.25 million worth of capital. The firm currently has 26 portfolio companies and has already seen four exits: Incent Games (also known as ) was acquired by ; was acquired by , a subsidiary of Daimler; was acquired by and by .

Per its name, ATX Seed Ventures started by primarily investing in Austin-based companies. It has since branched out to investing in other Texas cities and is now considering 鈥渟urrounding鈥� markets.

Despite its name, the firm doesn鈥檛 just invest in the seed stage although that鈥檚 when it most prefers to get in.

鈥淲hat we really came into the market trying to do was institutionalize seed by leading rounds, taking a board seat and structuring terms,鈥� Shonk told 萝莉视频 News. 鈥淲e like being a company鈥檚 first institutional round and bringing in what we think of as Series A and B rigor and discipline at the seed valuation stage.鈥�

One of the things the firm likes most about being the first institutional check is that it can 鈥渃ontrol valuation a bit.鈥�

鈥淰aluations have kind of gone nuts, especially in later rounds,鈥� Shonk said. 鈥淪o this way, we鈥檙e not inheriting someone鈥檚 prior complexities.鈥�

Bentz agrees.

鈥淚n terms of valuations, they鈥檙e not as out of control here in Texas as they are in some markets,鈥� he said. 鈥淪o, on a risk-adjusted basis you can still make some really good deals here.鈥�

As for sectors, ATX is particularly focused on B2B鈥攚hich Austin is known for鈥攚ith a SaaS business model. But it鈥檚 also interested in supply chain/manufacturing, real estate tech, and energy-related businesses.

鈥淲e try to run the races we think we can win,鈥� Bentz said. 鈥淪o we focus on our own areas of expertise as well as that of our LPs so that we can add strategic value, and not just put money into deals.鈥�

Another Quake

Meanwhile, Quake Capital 鈥� which moved its headquarters from New York to Austin last July 鈥� is also in the process of raising a $100 million fund.

Founded in January 2016, Quake started investing in early 2017 out of a $4.65 million fund. It invested in 31 companies out of that fund. , managing partner of Quake鈥檚 Seattle office, noted that Quake鈥檚 second fund was capped at $15 million 鈥渂y request鈥� of its LPs. That fund closed in December. Overall, the firm currently has more than 110 companies in its portfolio.

As part of what it describes as its increased commitment to the region, the firm has hired a new managing director, , to run its Austin office. As part of his new role, Fernandez will oversee Quake鈥檚 ATX accelerator program as well as the firm鈥檚 investor and advisor network. Most recently, he worked as an operations and finance partner at B.

鈥淲e believe Quake is coming into the Austin market at the right time,鈥� Fernandez said. 鈥淲e see a real opportunity to participate in this early stage/seed category as most of the existing VCs seem to be moving up the food chain a bit and investing at later stages.鈥�

Brisimitzis reiterated Quake鈥檚 confidence in the Austin market.

鈥淲e see a tremendous amount of growth in this ecosystem and want to be a part of it,鈥� he told 萝莉视频 News.

As Austin鈥檚 startup ecosystem continues to grow, there鈥檚 no doubt two new nine-figure funds will be welcomed with open arms.

Photo credit:聽Logan Fahey Photography