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Indy-based High Alpha Capital launches new $110M fund
We know that a lot of elements go into the formation of a startup ecosystem. When your city is outside of the major coastal tech centers, it takes a deliberate effort to get such a system off the ground. For Indianapolis, Indiana, it started with the creation of ExactTarget in 2000. When that company was sold to Salesforce for $2.5 billion in 2013, it helped bring a bushel of cash into the startup system.
Today, the venture capital firm that connects back to that ExactTarget acquisition, High Alpha Capital, announced a new $110 million fund. The company concentrates on B2B SaaS startups. Kristian Andersen, partner and co-founder at High Alpha sees the fund in the context of the pandemic and the changes it has brought to how businesses are run.
“We are living in a [time] of almost unrivaled disruption, which has created a host of challenges for individuals, businesses, and society as a whole. In spite (or possibly because) of those challenges, we’re more confident and motivated than ever to help support the next generation of founders as they seek to transform the world through the marriage of entrepreneurship and technology,” Andersen said.
Of course, cash is a key ingredient in any startup system recipe. ExactTarget’s founders were flush with it after the acquisition and Scott Dorsey, one of the firm’s founders says they wanted to build a system from the ground up that included education, a system to encourage entrepreneurship, math skills, a pool of engineering talent and of course, a venture capital firm to drive investment.
“I think of the recipe as talent, capital, support and mentorship. So talent has to be a sharp focus, which is certainly is for us at High Alpha and across the Indianapolis market. The second piece is capital, and markets like Indy often don’t have access to capital and that’s been important that we’re raising our own funds,” he said.
He added, “Thirdly, I think it’s just support and mentorship and that’s really what High Alpha is built to do. We have 40 of us on the team with SaaS experts across design, marketing, product engineering, finance and HR — all Centers of Excellence you need to start and scale a SaaS company,” he said.
The firm is divided into two parts. The first is High Alpha Studio, which is a kind of incubator for really early stage founders and the second is High Alpha Capital, which is the focus of today’s announcement.
This is third fund for the company. The first was High Alpha One worth $21 million. The second one, High Alpha Two was worth $85 million. Combined with today’s announcement, the total raised across the three funds is $216 million. While the first two funds’ investments were mostly in the Indy area, the plan with the newest one is to expand beyond the region with at least some of the investments.
The firm concentrates on enterprise B2B SaaS companies from pre-seed through Series A investments, so concentrating on early stage companies that it can help nurture and learn from their experiences building ExactTarget into a successful company.
Among the companies they invested in include Attentive, SalesLoft, Zylo, Terminus, The Mom Project, Lessonly, LogicGate, MetaCX and Socio.
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Indianapolis-based Malomo raises $2.8 million to turn order tracking into a branded customer experience
Yaw Aning named Malomo, the service he launched for small businesses to turn their order-tracking services into branded customer experiences, as a tribute to his mother, who was a small business owner herself.
“Malomo” means flowers in Swahili and it was the name of Aning’s mother’s small soap-making business which she built over the years — even as she was battling the cancer to which she would eventually succumb.
The small Indianapolis startup has just raised $2.8 million to expand its services providing a new marketing channel for the Shopify retailers of the world who can always use more ways to reach new customers, Aning said.
The financing came from the San Francisco-based firm, Base 10, and New York’s Harlem Capital, along with commitments from previous investors Hyde Park and High Alpha.
Aning came to entrepreneurship as an Orr Fellow, an Indiana program that takes 10 graduates and places them in high-growth companies. While Aning worked in corporate finance, he was always interested in the startup world, and started is first company, Pocket Tales, an online reading game for children.
That business was followed by Sticks and Leaves, a web design agency that gave Aning his first view into the opportunity that order tracking presented as a space for a better customer experience.
Along with co-founder Anthony Smith, Aning built a service that connects with a single click to the Shopify platform and creates custom, branded tracking pages for each brand. “It’s a landing page for a brand. They use it like they would use any marketing asset,” Aning said. “The strategy is to build up integrations to the other tools merchants use to create rich experiences leveraging those tools.”
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How to go to market in middle America
Deborah Eisenberg is the founder of TechStarts PR, where she helps technology companies both big and small hone their message and reach their audience.
There comes a time for many startup companies where they either realize they need to do a nationwide rollout, or they need to actively target buyers in the middle of the country. If you are a startup on either the East or the West Coasts, it’s worth thinking about how this market might present its own set of unique challenges, and how you plan to overcome them.
There are a lot of misconceptions about what some people call “flyover country,” and as a San Francisco native who spent two decades in New York, Washington DC, and Boston before moving to Pittsburgh, I can assure you they are almost all wrong. Without getting into specifics, the reality of “middle America” is that it’s the same as anywhere else.
Income, education, world view, and waistlines are all varied. It’s pretty accurate that San Francisco possesses a culture obsessed with fitness and entrepreneurship, but California isn’t necessarily all like that, and if you think it is, I encourage you to go to Bakersfield, the Central Valley, or Eureka sometime.
In addition, just because the stereotypes are wrong doesn’t mean there’s nothing different about doing business here. As you think about how to conduct your rollout, here are some things you should consider:
Table of Contents
Research
As with any market, research is key since it informs every other aspect of the rollout. Start by looking into who your competition is.
Since there are fewer VC-backed startups in middle America, and smaller companies tend to get less press, the research may be harder. However, there are some major universities that are actively putting money into their own Entrepreneurship programs and those spinoffs often do very well.
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