NEWS: OCTANe-VC Partnership

The strategy of OCTANe  to increase access to capital for early-stage companies is paying off. For the first time, the Aliso Viejo organization has developed a strategic partnership with a venture capital firm, beyond the customary relationships it has with investment firms.

Miramar Digital Ventures, with HQ in Newport Beach, is raising a $100 million fund that will be directly accessible to companies that participate in OCTANes Launchpad accelerator and beyond — through its Growth Services division. (OCTANe launched that division last year to provide resources, such as capital, for companies to grow and scale after they graduate from Launchpad.)

Launchpad companies have obtained money from VC firms around the country for years, enabling the raise of more than $1.7 billion collectively, OCTANe CEO Bill Carpou said.

This new strategic partnership is significant, however, because it highlights OCTANe’s commitment to leverage the local VC community.

It also aligns with OCTANe’s plan to create a coalition of investment firms, incubators and accelerators to unify the entire SoCal innovation ecosystem, with OC at the epicenter, Carpou told OC Startups Now, adding that, “Our Miramar collaboration is the first step of this strategy.”

OCTANe CEO

And, Miramar is “excited about the prospect of working even more closely with OCTANe to support the next generation of disruptive technology companies here in SoCal,” said Bruce Hallett, the fund’s co-manager and a long-time OCTANe Board member.

 

Bruce Hallett, Miramar Digital Ventures II fund co-manager

Fund Focus

The new fund, known as Miramar Digital Ventures II (MDV II), will be accessible to the OCTANe-affiliated companies working in the realm of data, as that field evolves and accelerates. Specialties include artificial intelligence and the internet of things (the connection of any device with an on-and-off switch to the internet, and/or to each other). The artificial intelligence market, for example, is expected to grow from approximately $21 billion this year to about $191 billion by 2025, according to news reports, based on the ever-increasing amount of data and the expanding use of cloud-based applications and services, as well as the increasing demand for intelligent virtual assistants.

MDV II is for seed and early-stage companies. Its geographic targets are Orange, Los Angeles and San Diego counties, as well as the western mountain states.

This is Miramar’s second fund. Its first fund has some impressive stats:

– It invested in 26 companies

– 60% of those investments went to SoCal companies that employ more than 1,450 highly-skilled tech workers

– Initial investments in those companies averaged approximately $300,000

– Those companies are valued at more than $2 billion in total

Hallett and Sherman Atkinson will return to run MDV II. The duo has supported and/or operated some of the most successful tech startups to come out of SoCal in the past two decades — Applied Semantics, which developed software apps for the online advertising, domain name and enterprise information management markets. (It had HQ in Santa Monica until being acquired by Google); MySpace, one of the original social networking sites with HQ in Beverly Hills; Factual, a location data company with HQ in Los Angeles; and Scopely, a touchscreen entertainment network with HQ in Culver City. They were also early investors in Veritone, OC’s highest-performing tech IPO last year. (Veritone, with HQ in Newport Beach, provides media analytics through its AI platform.)

OCTANe’s far-flung efforts

OCTANe is not just working locally to obtain VC funds for its Launchpad and Growth Services companies. It’s also been focusing on investor hot spots like Boston, where it’s been working with the Massachusetts Medical Device Industry Council since 2016 to bring OC med-tech companies to the attention of investors in Boston.

And, some OCTANe team members, along with representatives of the Greater Irvine Chamber of Commerce, just returned from their second annual trip to the U.K. Their first trip was in early 2017. The goal is to meet with various organizations – startups, incubators and connectors – that are considering setting up offices in Orange County and/or gaining U.S. exposure for their products and services.

Funding From Within

OCTANe already launched its own fund, Visionary Ventures, in which it’s a general partner. This fund invests directly in ophthalmology companies. Led by Jeff Weinhuff, it’s almost fully invested and expects to put as much as $35 million to use, Carpou said.

OCTANe plans to launch additional funds later this year “that build upon the success of Visionary Ventures and its deep VC relationships” he added.

 

About The Author

Deirdre Newman is a long-time journalist, who's covered OC startups for a few years.

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