TL;DR
A* Capital, led by Kevin Hartz, has closed its third fund at $450 million. The fund aims to back at least 30 startups across AI, fintech, healthcare, and security. This marks a significant growth for the firm and reflects strong investor confidence.
Kevin Hartz’s venture firm A* Capital has closed its third fund at $450 million, marking a significant milestone in its investment trajectory and signaling sustained investor confidence.
The fund, named Fund III, was announced on Tuesday and will deploy capital over the next two to three years. It aims to invest in at least 30 startups, with typical check sizes between $3 million and $5 million.
Limited partners include nonprofits, foundations, and endowments, with Carnegie Mellon University publicly disclosed as one of the backers. This fund follows the firm’s previous raises of $315 million in 2024 and $300 million in 2021.
Founded in 2020 by Kevin Hartz and Bennet Siegel, A* Capital takes a generalist approach, investing across sectors such as AI, fintech, healthcare, and security. Hartz, known for co-founding Xoom and Eventbrite, has emphasized backing young entrepreneurs, including nearly 20% of the portfolio involving teenage founders, according to Hartz’s statements last fall.
Why It Matters
The successful closing of Fund III demonstrates strong investor confidence in A* Capital’s strategy and track record. It also underscores the increasing prominence of early-stage venture firms that support a diverse range of sectors and founder backgrounds, including young entrepreneurs. This funding boost positions A* Capital to expand its portfolio and influence in the startup ecosystem.
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Background
Hartz’s previous funds have backed notable startups like Ramp and Mercor, and the firm’s focus on young founders has drawn attention within the venture community. The firm’s growth reflects broader trends in early-stage investing, where generalist funds are expanding their reach across multiple sectors and supporting diverse founder profiles.
“We’re excited to deploy this capital across a broad spectrum of innovative startups and to continue supporting young entrepreneurs who are redefining their industries.”
— Kevin Hartz
“Closing our third fund affirms our confidence in the market and our ability to identify promising startups early on.”
— Bennet Siegel
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What Remains Unclear
It is not yet clear how much of the new fund has been allocated to specific sectors or startups, or how the firm’s investment strategy may evolve with this larger capital base.
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What’s Next
The firm plans to begin deploying capital over the next two to three years, with a focus on early-stage investments. Monitoring the startups funded and their progress will be key indicators of the fund’s success.
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Key Questions
How much did A* Capital raise for its third fund?
The firm closed its third fund with $450 million in committed capital.
What sectors does A* Capital invest in?
The firm invests across multiple sectors including AI, fintech, healthcare, and security.
Who are some of the limited partners backing the fund?
Limited partners include nonprofits, foundations, endowments, and Carnegie Mellon University.
What is the firm’s investment strategy?
A* Capital takes a generalist approach, backing at least 30 startups with check sizes between $3 million and $5 million, over the next two to three years.
