Signia Venture Partners raises $85 million fund for early stage tech companies

Signia Venture Partners is announcing today that it has raised a second fund — totaling $85 million — to invest in early-stage technology companies.

The fund is headed by a seven-member team that includes Rick Thompson, former chairman of Playdom (which Disney bought for $763 million in 2010); Ed Cluss; Zaw Thet, and Sunny Dhillon. In an interview with VentureBeat, Thet said that the new fund will invest in startups that fit into the theme of mobility and data analysis.

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Dhillon and Thompson have been active in game investments over the years, but the venture fund hasn’t invested much in games lately, as mobile gaming has become a cutthroat market. Dhillon has been looking closely at augmented reality and virtual reality investments, but Signia is being picky about its investments in those sectors, too.

Signia Venture Partners raised its first $77 million fund in 2012, and it had two successful $1 billion-plus exits in the past year with Cruise, a self-driving car startup, and FunPlus, a mobile game company based in China.

All told, Signia Venture Partners is managing more than $160 million, and its mission is to be the entrepreneur’s most-helpful investor. The company doesn’t believe in raising a billion-dollar fund, like other VCs, because of its focus on the early stage, rather than the late stage, Thet said. He said the partners know how to add value by meeting with entrepreneurs early on.

“As former entrepreneurs (over a dozen companies which we started/ran ourselves), we know that great investors come in many different forms,” Thet wrote in a post. “Some investors are your go-to for anything (our goal), some leave you alone (which is ok) and some drive you completely crazy (which is not ok). We decided that to be great investors we wanted to focus on where we could be most helpful, which is in the early stages of a company’s lifecycle (seed and Series A). We’ve been the first check and lead investor for over 80 percent of the investments we’ve made so far.”

Thet wants entrepreneurs pitching Signia to be “mission-oriented, passionate, data-driven, and looking to go the distance.” He also said, “Location is also important, as we find we aren’t as helpful when we’re not meeting with entrepreneurs face-to-face. We largely invest in Bay Area start-ups or those within an hour or two plane flight. There are exceptions to that rule, of course, but only when there is a relationship with the entrepreneur that allows us to still help virtually.”

He added, “We’re looking for cash-efficient disruption of large existing markets or the creation of new ones. Broadly speaking, we invest in technology companies that are taking advantage of mobility and data. Mobility to us means not just the rise of the smartphone as the dominant computing platform, but also new technologies, such as Virtual Reality and Augmented Reality (VR/AR).”

Thet said that the fund will look at game companies, but those pitches have to be truly disruptive. The company will make six to eight investments a year, but it will look at hundreds.

“We haven’t done a new game deal in three years, because we see the mobile game market for startups as over,” Thet said. “We aren’t sure about the business models yet in VR.”

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Other areas ripe for investment are transportation, fintech, commerce, VR/AR, big data, mobile SaaS, and A.I.

Thet also said, “If we’re only seeing you at board meetings then we’re not doing our jobs. We typically meet with all our portfolio companies once a week, with many more texts and calls in between. Over the years, we’ve also built a great network of venture partners, advisors, LPs, and friends of the fund that we call in to help whenever necessary. The journey of starting and growing a company is never smooth. We’re here to help in the good times and the bad.”