The New Mexico State Investment Council has hooked a big fish in the venture industry with a $15 million commitment to Silicon Valley-based Crosslink Capital’s latest venture fund.
Crosslink is an industry veteran with about $2 billion in assets and investments in more than 100 companies over nearly 30 years. By committing $15 million to a new $300 million fund that Crosslink is now raising, the SIC’s private equity program has reeled a venture shark into New Mexico’s startup ecosystem, said SIC spokesman Charles Wollmann.
Under the SIC program, Crosslink must agree to invest in local companies, or encourage others to invest, at least as much as SIC’s commitment to the fund.
“Crosslink has a reputation nationally as a leading venture capitalist,” Wollmann said. “We’re excited that they’ll be in New Mexico looking at deals in companies here.”
Crosslink will likely generate a lot more than $15 million for local startups, given its history of follow-on investments in companies it targets, plus its ability to attract co-investments in companies from other venture firms, said Brian Birk, managing partner at Sun Mountain Capital in Santa Fe, which advises the SIC on private equity commitments.
In fact, Crosslink is already a player in the local startup scene. It’s one of the original investors in Descartes Labs Inc. in Santa Fe, which closed on a $30 million round of funding in August to continue building and marketing advanced image-recognition software for satellite imagery analysis. Crosslink committed $3 million to Descartes last year and then joined this summer’s follow-on investment.
“Their model is to first focus on a high number of seed and early-stage investments in companies,” Birk said. “They have a bigger fund that they then tap into to pump $10, $15 or $20 million more into startups that are successful.”
Crosslink also has a huge national network of experienced entrepreneurs and investors it calls the “Alpha Club.” They help Crosslink explore investment opportunities nationwide and provide veteran business leaders to run startups, Birk said.
Descartes founder and CEO Mark Johnson is an Alpha Club member.
SIC’s $15 million commitment to Crosslink is substantially more than the $10 million-and-below commitments made to other venture funds in recent years through the private equity program, Wollmann said.
“We approved a sizable commitment given Crosslinks’ long track record and history of successful investments,” Wollmann said.
Crosslinks is already actively seeking more deals here. It met this month with University of New Mexico and Air Force Research Laboratory leaders at the new Innovate ABQ Lobo Rainforest building Downtown to learn about Albuquerque’s emerging innovation district and potential investment opportunities.
“They’re a great addition to our ecosystem,” said UNM Chief Economic Development Officer Lisa Kuuttila. “They bring a lot of expertise and experience in commercializing new technology.”