Tech Investment Firm Raises $574M To Bet Big On AI
Technology investor Invictus Growth Partners has secured $574 million for its second flagship fund and related co-investment vehicles, as first reported by the Wall Street Journal.
Founded in 2019 by John DeLoche and William Nettles, Invictus specializes in growth buyouts of lower middle-market businesses in sectors such as cloud, cybersecurity, and fintech. Invictus targets founder-led, bootstrapped companies generating at least $10 million in annual recurring revenue.
Betting Big On AI
With its new fund, the California-based firm will strengthen its focus on AI and machine learning technologies driving key industries.
“AI and machine learning are at an inflection point,” DeLoche told the Wall Street Journal. “Those companies that adopt them have the ability to become winners and those [that] don’t are going to be left behind like Blockbuster was.”
Invictus also uses an in-house AI tool, the Deal Intelligence Assessment Neural Engine (DIANE), to source deals and improve operations. Of their 12 completed investments, ten were sourced with DIANE.
Oversubscribed round
Invictus Growth Fund II closed with $488 million, surpassing its original $350 million target and even its $450 million hard cap. An additional $86 million was secured for co-investments, bringing the total to $574 million. This new vehicle more than doubles the firm’s debut fund, which raised $216 million with an additional $106 million for co-investments in 2022.
The fund drew strong backing from both existing and new institutional investors. Notably, the New York State Common Retirement Fund returned for a second round, while the New Mexico State Investment Council joined as a new backer. Over two-thirds of the fund’s capital came from new institutional supporters, including foundations and university endowments.
Fund II’s Investments so far
Invictus has already committed over 25% of Fund II’s capital across three deals, with a fourth in progress. Average check sizes are around $42 million, often paired with co-investments. The fund’s first investment was in ThreatModeler, a cybersecurity software company.
Portfolio firms also benefit from the Invictus Guild, a network of seasoned tech executives offering expertise across ten key disciplines, such as product development, data science, and customer success. These advisors also invest in each portfolio company.
