With its $200 million new fund, Album plans to deploy $50MM–$60MM in seed funding to 20 new startups, with the balance going to finance follow-on investments.
Earlier today, Lehi, Utah-based Album announced it has launched its fourth fund with $200 million in new capital, the largest amount ever raised by the eight-year-old venture capital firm.
Prior to the opening of Fund IV, Album had previously raised, and deployed, $300 million to over 65 companies, ranging from Andela and ZipBooks, aka A–Z.
Among these 60-plus firms (most based in Utah), eight have gone on to achieve mythical unicorn status, firms worth $1 billion or more, specifically
- Andela, formed in Nigeria and transplanted to New York City,
- Divvy, acquired by Bill.com for $2.5 billion in 2021,
- Owlet, now publicly listed as OWLT on the New York Stock Exchange,
- Taxbit, and
- Weave Communications, now publicly listed as WEAV on the NYSE.
When I spoke yesterday afternoon with the three Album Founders and General Partners—Sid Krommenhoek, John Mayfield, and Diogo Myrrha—they explained that since launching in 2014, 70% of their investment dollars have been placed with Utah-based companies.
And the $200 million raised in Fund IV is the largest amount Album has raised in any one fund, 10X larger than the initial fund Album launched some eight years ago.
“Our fund size is deliberate, and allows us to make use of $50 to $60 million across 20 companies. What we haven’t had in the past is more follow-on capital, (and enables Album to) double down and triple down on our investments.”
According to the company news release, the new fund “... boast(s) participation from a third of the very founders (Album has) backed over the last decade (more than 30) and include(s) founders from several of the unicorns (the firm) backed—Degreed, Podium, Route, Taxbit, and Weave.”
Myrrah explained that
“The founders we’ve backed put us on the map and, in a very real way, are the force behind our continued approach to investing. We like the notion of ‘founders to funders’ as so many in our local ecosystem are putting their hat in the ring as investors. We continue to need this smart capital as it comes from a place of real experience and empathy,”
Each of the three Album founders have operational experience, two in business-to-consumer industries (Myrrha and Krommenhoek), with Mayfield in the business-to-business field.
However, the professional and cultural differences between the partners creates real value for both its portfolio companies and Album, Krommenhoek says.
“(Founders) care about what you did before investing and that informs how you invest, what they can expect in the boardroom when the road gets bumpy, and even where your fund dollars are coming from (and thus who your fund is benefitting). All of these factors are coming up in our meetings with founders and as an investor you have to have credible answers.”
The partners explained that Album is equally owned by three very different founders, diversity that produces different worldviews, and yet has led to “disproportionate returns.”
“We’re battle-tested and market-tested, in a Darwinistic way,” Mayfield said.
“We're not diverse for diversity’s sake,” Myrrha said. “But we have noticed that there is performance that comes from our own diversity. (As a result) we have performed on par with the top funds in not just Utah, but in the country, and in the world.”
And now, Album has an additional $200 million at its disposal to help drive success across both startups and growing companies in Utah and beyond.