Boston-based Flint Capital just closed its third fund at $160 million, four times the amount of its initial 2013 fund. The capital will be split evenly between early and late stage investments, with the firm doubling down on IT, cybersecurity, fintech and digital health startups. Its success is in large part because of a unique strategy over who its courts as limited partner investors.
The firm is over a decade old, founded by partner Dmitry Smirnov, who was previously CEO of Russia-based investment firm FINAM Global. He immediately made an unorthodox decision: instead of pursuing traditional LPs like pension funds or endowments, he sought out IT entrepreneurs, believing they would want a front row seat to the next generation of technology.
Sergey Gribov, one of Flint’s three partners, said the firm also has a global mandate and invests strongly in Europe and Israel — as long as the startup has its eyes on expanding into the US. “We don’t really care where physically the team is located, as long as we go off to the US market,” he said.
That’s been a good strategy for Flint: the firm has backed identity verification startup Socure, last valued at $4.5 billion, adoption platform WalkMe, which was acquired by SAP for $1.5 billion, and Flo, the women’s health app recently valued at over $1 billion.
For this latest fund, partner Andrew Gershfeld highlighted that several investors were actually founders that Flint backed years ago. He gave the example of Nir Giller and Omer Schneider, the founders of CyberX, a cybersecurity company that Microsoft acquired in 2020. For Gershfeld, founders like these reinvesting their profits into Flint was a sign “that we were doing something right.”
Flint’s successful fundraise is a vote of confidence amongst a dire fundraising atmosphere for smaller, or younger emerging funds. This year, funding for venture firms is the lowest it’s been since 2019, and, of the few that have secured capital, established firms are taking a bigger and bigger cut of the pie, according to the Q2 2024 Pitchbook-NVCA Venture Monitor.
It took the Flint partners 18 months to fundraise and, while the fund was anchored by previous investors, they felt the sluggishness of the current market. “The conversion from that first conversation into becoming a limited partner dropped during this year,” Gershfeld said. “It’s a fact – we can’t say that it is not the case.”
The fundraise is particularly impressive as the partners have spent the last year helping their Israeli startups, like Cynomi and Sensi.AI, fundraise throughout the war in Gaza. Gribov, who regularly travels to Israel, recalled video-chatting with founders decked out in combat gear, or coaching companies who had portions of their workforce pulled into the military. His efforts paid off: Sensi.AI, a digital health startup, closed its $31 million Series B in late June.
Gribov said that seeing these companies thrive despite the global conflict made him more confident than ever in Flint’s global mandate. “A lot of companies continued to deliver and even outperform,” he said.