HIPstr Raises $100 Million to Combat Early-Stage Funding Drought

Early-stage investment operation HIPstr has closed its $100 million debut fund.

The company, launched by private equity executives David Moross and Mark Bezos — half-brother of Amazon founder Jeff — is an arm of HighPost Capital. 

“We launched HIPstr to capitalize on an attractive market opportunity driven by a reset in early-stage company valuations alongside a structural shift in how entrepreneurs scale companies,” Moross said in a news release Thursday (Aug. 15). 

The company said it has to date led or made Series A investments in six companies: Closer, Sprinter, Wild Common, EverFence, RAD and After.com.

“With six companies already in the portfolio, we look forward to continuing to identify highly compelling opportunities for our investors and working with entrepreneurs to help them build and scale their high-growth and capital efficient brands,” Moross added.

Last year saw the startup world struggle to gain traction, with funding droughts leading more than 2,300 venture-backed companies to close their doors.

This year has seen some recovery on some fronts. For example, June brought reports that tech investments in Europe had begun blossoming after a long fallow period.

For example, private tech investor Creandum, which has invested in Klarna and Spotify, had just unveiled a $544 mullion fund, which came together “in record time,” general partner Carl Fritjofsson said in an interview with the Financial Times (FT).

“There is a dramatic change in the sentiment, appetite and activity across the industry,” he said.

And as noted here earlier this month, private equity giants such as KKR and Apollo have invested $162 billion in anticipation of a deal-making revival.

“The deal market is back,” Scott Nuttall, the co-head of KKR, told the FT. “This year, we not only have an open market, we have pent-up supply of deals … coming to markets. So we are optimistic.”

That isn’t to say that things are moving smoothly for every company. For example, last week saw Tally, a FinTech focused on helping consumers manage credit card debt, announce that it was shutting down, with CEO Jason Brown saying the company was “unable to secure the necessary funding” to remain in operation.

The fact that the company “could not access funding implies that it needed to offset at least some cash burn with investor dollars,” that report said. “Investors, who had valued the company recently at about $855 million and had raised a cumulative $172 million, can be a fickle lot. Crunchbase has noted that funding throughout the financial services industry has been slowing for several quarters.”