TL;DR
A* Capital, founded by Kevin Hartz, has closed its third fund with $450 million. The fund aims to back at least 30 startups over the next two to three years across various categories. This marks continued growth for the firm, which has a track record of investing in young entrepreneurs and diverse sectors.
Kevin Hartz’s A* Capital has closed its third fund at $450 million, marking a substantial increase from previous funds and reinforcing its position as a notable early-stage investor.
The $450 million Fund III was announced on Tuesday by A* Capital, a venture firm founded in 2020 by Kevin Hartz and Bennet Siegel. The fund will deploy capital over the next two to three years, with an average check size between $3 million and $5 million, targeting at least 30 startups across sectors including AI, fintech, healthcare, and security.
Limited partners in the fund include nonprofits, foundations, and endowments, with Carnegie Mellon University among the publicly disclosed backers. This fund follows the firm’s previous raises: $315 million in 2024 for Fund II and $300 million in 2021 for Fund I. Hartz, a serial entrepreneur known for co-founding Xoom (acquired by PayPal for $1.1 billion in 2015) and Eventbrite (public in 2018), has emphasized backing young founders, with nearly 20% of the current portfolio involving teenage entrepreneurs.
Why It Matters
This development underscores the continued confidence in early-stage venture investing, especially in sectors like AI and fintech that are rapidly evolving. Hartz’s focus on young entrepreneurs and diverse categories positions A* Capital as a distinctive player in the venture ecosystem, potentially influencing startup funding trends and investor interest in early-stage ventures.
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Background
Hartz’s firm has been active since 2020, quickly establishing a reputation for backing innovative startups and young founders. The firm’s previous funds have supported companies like Ramp and Mercor, reflecting its broad investment scope. The recent fund raise aligns with a broader trend of increased venture capital activity in early-stage technology sectors, despite market fluctuations.
“We’re excited to continue supporting innovative entrepreneurs across sectors, especially those with diverse backgrounds and fresh ideas.”
— Kevin Hartz
“The $450 million fund will enable us to back promising startups that are shaping the future of technology and finance.”
— Bennet Siegel
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What Remains Unclear
Details about specific investment targets or the geographic focus of the new fund are not yet confirmed. It is also unclear how the fund’s deployment will compare to previous rounds in terms of sectors or startup stages.
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What’s Next
The firm is expected to begin deploying capital immediately, with announcements of initial investments likely in the coming months. Monitoring the fund’s performance and its impact on the startup ecosystem will be key in the near term.
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Key Questions
What sectors will A* Capital focus on with this new fund?
The fund will target sectors including AI applications, fintech, healthcare, and security, among others.
How much will individual startups receive from the fund?
The average check size will be between $3 million and $5 million, with at least 30 startups expected to be backed.
Who are the limited partners in the fund?
Limited partners include nonprofits, foundations, endowments, and Carnegie Mellon University.
What is the significance of this fund for Kevin Hartz’s firm?
This third fund signifies ongoing growth and confidence in A* Capital’s investment approach, expanding its capacity to support early-stage startups across multiple sectors.
