Two Venture Capital Firms Tapped to Receive InvestMaryland Funds
BALTIMORE, MD (January 31, 2013) – Governor Martin O’Malley and Peter Greenleaf, chairman of the Maryland Venture Fund Authority (MVFA), today announced that New Atlantic Ventures and Kinetic Ventures have been selected to receive funds through the State’s $84 million InvestMaryland program. New Atlantic will receive $8 million and Kinetic will receive $5 million to invest in innovative early-stage businesses in the State. As part of the agreement, the firms, if successful with investments, will return 100 percent of the principal and 80 percent of the profits to the State’s general fund.
Created by Governor O’Malley and passed by the Maryland General Assembly in 2011, InvestMaryland is an historic initiative to fuel Maryland’s Innovation Economy, support entrepreneurs and stimulate the economy and job creation.
“We are excited to bring New Atlantic and Kinetic on board as partners in InvestMaryland,” said Governor O’Malley. “This critical program leverages the capital and expertise of the private sector to ensure that our early-stage companies get the funding they need to further discoveries that feed, fuel and heal our world.”
“New Atlantic and Kinetic bring to the table impressive histories of investing in Maryland and supporting young companies in high-growth Maryland industries,” said Greenleaf, who is also President of MedImmune. “We look forward to working with New Atlantic and Kinetic and, together, supporting the next generation of Maryland’s Innovation Economy.”
New Atlantic and Kinetic are the second and third venture firms selected to participate in InvestMaryland. Last month, the State committed $12 million to Grotech Ventures, another local venture capital firm.
“Maryland has all the ingredients to be a dynamic and world-leading hub of entrepreneurship,” said Dominick Murray, Acting Secretary of the Department of Business and Economic Development (DBED), which is administering the program. “InvestMaryland and the private investment that will follow will further set Maryland apart in the increasingly competitive, knowledge-based economy.”
New Atlantic and Kinetic are unable to comment due to legal restrictions on public statements during their fundraising periods.
New Atlantic Ventures makes seed and early-stage investments in mobile, e-commerce, advertising, cybersecurity, healthcare and online education technology businesses. The firm began in 1999 as affiliates Draper Atlantic and DFJ New England, which joined forces in 2006 to create New Atlantic. The firm’s portfolio includes American Honors College, CivicScience Inc., GlobalLogic, Invincea, Moda Operandi, Spotflux, Stitcher and Qliance.
Kinetic Ventures is a leading venture capital investor in high growth, industry-defining information technology, communications, and power and clean technology companies. The firm has managed eight early stage funds since 1985. Its portfolio includes Ciena, VerticalOne, Corvis, Cerent, Peace Software, Broadware, NYSE Blue, Calix, Altierre and SmartSynch.
InvestMaryland is the largest venture capital investment in history by the State. Earlier this year, $84 million was raised for the program through an online auction of premium tax credits to insurance companies with operations in Maryland. Of that funding, two-thirds will be managed by private venture firms, like New Atlantic and Kinetic. The remaining third is being invested by the state-run Maryland Venture Fund (MVF).
The MVF was seeded with $25 million and over its 17-year existence invested in hundreds of start-up and early stage technology and life sciences companies, generating a $67 million return, 2000 jobs and more than $1 billion in private investment. Returns on the funds invested through the MVF are reinvested in the program.
Key tenets of InvestMaryland have been implemented over the past 18 months. In August 2011, the Governor named the Venture Fund Authority, a nine-member panel that oversees the administration and operation of the program. Early last year, the Authority selected Grant Street Group to prepare for and run the tax credit auction and selected Altius Associates, a London-based firm, to oversee the selection of private venture firms to invest InvestMaryland funds. And since July, InvestMaryland has, through the Maryland Venture Fund, invested $2.2 million in seven companies.
ABOUT DBED: The Maryland Department of Business and Economic Development stimulates private investment and creates jobs by attracting new businesses, encouraging the expansion and retention of existing companies, and providing workforce training and financial assistance to Maryland companies. The Department promotes the State's many economic advantages and markets local products and services at home and abroad to spur economic development and international investment, trade and tourism. Because they are major economic generators, the Department also supports the Arts, film production, sports and other special events. For more information, visit www.ChooseMaryland.org.