Boston-based Flint Capital has closed its third fund with $160 million, four times the size of its first fund in 2013. The capital will be split evenly between early and later stage investments, and the firm will focus more on IT, cybersecurity, fintech and digital health startups. The firm's success is largely due to its unique strategy of who it attracts as limited partner investors.
The firm is over 10 years old and was founded by partner Dmitry Smirnov, former CEO of Russia-based investment firm FINAM Global, who quickly made an unconventional decision: rather than pursuing traditional LPs like pension funds and endowments, he sought out tech entrepreneurs who wanted to be at the forefront of next-generation technologies.
Sergey Gribov, one of Flint's three partners, said the firm also has a global mission and is actively investing in Europe and Israel as long as it has an eye on expanding into the U.S. “We don't really care where the team is physically located as long as we're going to the U.S. market,” he said.
It's been a good strategy for Flint, which has backed identity verification startup Socure, which was last valued at $4.5 billion, recruiting platform WalkMe, which was acquired by SAP for $1.5 billion, and women's health app Flo, which was recently valued at more than $1 billion.
Speaking about this latest fund, partner Andrew Gershfeld emphasized that some of the investors were actually founders that Flint backed years ago, pointing to Neil Giller and Omar Schneider, founders of CyberX, a cybersecurity company that Microsoft acquired in 2020. For Gershfeld, seeing those founders reinvesting profits back into Flint was proof that “we're doing something right.”
Flint's fundraising success is a sign of confidence in a tough fundraising environment for smaller or emerging funds: Venture funding this year is at its lowest since 2019, according to the PitchBook-NVCA Venture Monitor for Q2 2024, with incumbents capturing a larger share of the few companies that have secured capital.
Flint's partners took 18 months to raise the capital, and the fund was backed by previous investors who felt the current market downturn. “From the initial discussions, conversions to limited partners have dropped off over the course of the year,” Gershfeld said. “That's true, and you can't say it's not true.”
This funding is especially impressive because the partners have been helping Israeli startups like Cynomi and Sensi.AI raise capital throughout the Gaza conflict over the past year. Gribov, a regular visitor to Israel, recalled video chatting with founders dressed in combat fatigues and mentoring companies that had enlisted some of their employees in the military. His efforts paid off, with digital health startup Sensi.AI closing a $31 million Series B round in late June.
Gribov said seeing these companies thrive despite global conflict makes him more confident than ever in Flint's global mission. “Many companies continue to perform and even exceed expectations,” he said.