Flint Capital raises $160 million through an unusual financing strategy
Boston-based Flint Capital just closed its third fund at $160 million, four times the size of its original fund in 2013. The capital will be split evenly between early- and late-stage investments, with the firm doubling down on its investments in IT, cybersecurity, fintech and digital health startups. Its success is largely due to a unique strategy for who it recruits as limited partners.
The company is over ten years old and was founded by partner Dmitry Smirnov, who was previously CEO of Russian investment firm FINAM Global. He immediately made an unorthodox decision: instead of pursuing traditional LPs such as pension funds or foundations, he sought out IT entrepreneurs, believing they wanted to be at the forefront of the next generation of technology.
Sergey Gribov, one of Flint’s three partners, said the firm also has a global mandate and is investing heavily in Europe and Israel – as long as the startup has its sights set on expanding to the U.S. “We don’t really care where the team is physically located, as long as we go to the U.S. market,” he said.
For Flint, that’s been a good strategy: The company has backed identity verification startup Socure, which was last valued at $4.5 billion, adoption platform WalkMe, which was acquired by SAP for $1.5 billion, and Flo, the women’s health app that was recently valued at over $1 billion.
Partner Andrew Gershfeld emphasized that several investors in this latest fund were actually founders that Flint had backed years ago. He cited as examples Nir Giller and Omer Schneider, the founders of CyberX, a cybersecurity company that Microsoft acquired in 2020. For Gershfeld, having founders like these reinvest their profits in Flint was a sign “that we were doing something right.”
Flint’s successful capital raise is a vote of confidence in a difficult atmosphere for smaller or younger emerging funds. This year, funding from venture capital firms is at its lowest since 2019, and of the few that have secured capital, established firms are grabbing an ever-larger slice of the pie, according to the Pitchbook-NVCA Venture Monitor for Q2 2024.
It took the Flint partners 18 months to raise the capital they needed, and although the fund was backed by previous investors, they felt the doldrums of the current market. “The conversion rate from that initial conversation to forming a limited partner has gone down this year,” Gershfeld said. “That’s a fact — we can’t say it’s not the case.”
The fundraiser is particularly impressive given that the partners spent the last year helping their Israeli startups, such as Cynomi and Sensi.AI, raise funds during the Gaza war. Gribov, who regularly travels to Israel, remembers video chatting with founders in combat gear or coaching companies whose workforces had been drafted into the military. His efforts paid off: Sensi.AI, a digital health startup, closed its Series B at $31 million in late June.
Gribov said that despite the global conflict, the success of these companies has given him more confidence in Flint’s global mandate than ever before. “Many companies have continued to deliver and even achieved better results,” he said.
