Announcing Craft III: $1.1 Billion for SaaS and Marketplaces
By: Jeff Fluhr
Tags: Marketplaces, Venture Capital, Entrepreneurship, SaaS, Investment

Today we are announcing the closing of our two latest funds — Craft Ventures III ($612 million) and Craft Ventures Growth I ($510 million) — for a combined $1.12 billion. This brings our total assets under management to $2 billion. Combining our new growth fund with our flagship venture strategy gives us the ability to invest in the most exciting companies across both early and growth stages.

Over the last four years at Craft and prior to that as angel investors, we have backed over 30 unicorn companies at an early stage. Through our first two funds, we have had the privilege of partnering with dozens of visionary founders at their Series A or Series B round, and invested in many more at the seed stage. Some of the unicorns in Fund I and Fund II include Addepar, Bird, Bitgo, ClickUp, Multicoin, Neuralink, Pipe, Reddit, Sourcegraph, and SpaceX — and many more are on their way.

INVESTMENT FOCUS

While Craft has invested in market-defining companies across many categories, we have a special focus on two areas where we have unique expertise:

SaaS

SaaS businesses are attractive for their predictable, compounding recurring revenue. Moreover in our view, Bottom-Up SaaS companies, which have the ability to spread virally like a consumer product, are some of the most attractive opportunities because of their growth potential. At Craft, this practice area is led by David Sacks, who pioneered the “consumerization of the enterprise” as founder and CEO of Yammer, where he adapted growth tactics previously learned as founding COO of PayPal. SaaS companies in Craft’s portfolio include Addepar, AgentSync, ClickUp, OpenPhone, Scratchpad, Sendoso, Sourcegraph, and Vendr.

Marketplaces

Marketplace businesses are attractive for their strong network effects, liquidity-driven flywheels, and deep moats for defensibility. At Craft, this practice area is led by Jeff Fluhr, who created the playbook for vertical marketplaces as the founder and CEO of StubHub. The hyper-verticalization of marketplaces is now in full force, and Craft has invested in some amazing companies as part of this thesis, including Instawork, Seated, Shef, Snackpass, and Trusted.

EXPANDED TEAM

In a time when capital is abundant, our real value is advice and support. Every member of the Craft team has either been a unicorn founder or a successful operator. This deep industry expertise means that everyone at Craft is equipped to provide input or serve as a sounding board when founders need it most.

Operating Partners

For Fund III, Craft has doubled the size of our team of Operating Partners, seasoned former executives who can provide mentorship and advice to founders. This team helps our companies grow and navigate obstacles along the way. Areas of expertise include:

Talent & Recruiting : Sam Jakola oversees talent and recruiting, and leverages deep industry experience at both executive search firms and startups to help Craft companies recruit and retain the best talent.

: Sam Jakola oversees talent and recruiting, and leverages deep industry experience at both executive search firms and startups to help Craft companies recruit and retain the best talent. PR and Earned Media: Jessica Hoffman, an industry veteran with 20+ years working with startups including eBay, IAC, and SquareTrade, helps Craft’s portfolio companies articulate their market position and maximize brand awareness through earned media.

Jessica Hoffman, an industry veteran with 20+ years working with startups including eBay, IAC, and SquareTrade, helps Craft’s portfolio companies articulate their market position and maximize brand awareness through earned media. Executive Briefing Center/Community : Sarah Blanchard leverages her experience running Salesforce’s Executive Briefing Center to help Craft portfolio companies connect with CIOs and CTOs from Fortune 500 companies.

: Sarah Blanchard leverages her experience running Salesforce’s Executive Briefing Center to help Craft portfolio companies connect with CIOs and CTOs from Fortune 500 companies. Performance Marketing : Justin Turner has more than a decade of experience working for Facebook, Google and AT&T and supports Craft’s portfolio with guidance and advice on customer acquisition, online marketing, and paid media.

: Justin Turner has more than a decade of experience working for Facebook, Google and AT&T and supports Craft’s portfolio with guidance and advice on customer acquisition, online marketing, and paid media. Legal and Governance: Five-time GC Hillary Smith leverages her experience working with fast growth startups including Square, Zenefits and SuccessFactors to help Craft companies tackle legal issues related to risk mitigation, financings, and human resources.

Five-time GC Hillary Smith leverages her experience working with fast growth startups including Square, Zenefits and SuccessFactors to help Craft companies tackle legal issues related to risk mitigation, financings, and human resources. Government Relations & Regulatory: Chris Massey, an industry veteran who has led government relations for Chime, Hims, Lyft, Square and Zenefits, helps portfolio companies in regulated industries navigate existing regulations, introduce new legislation, and build support among the general public and legislators.

Chris Massey, an industry veteran who has led government relations for Chime, Hims, Lyft, Square and Zenefits, helps portfolio companies in regulated industries navigate existing regulations, introduce new legislation, and build support among the general public and legislators. Information Security: Josha Bronson leverages his 20+ years of experience managing infosec for companies including iSEC partners, nCircle, Foundstone and McAfee to help Craft portfolio companies identify and patch weaknesses in their security posture.

New Investing Partners

We are also delighted to announce four new partners on our investment team:

Brian Murray has been promoted to partner and COO at Craft, and leads the investment team. Brian is focused on B2B SaaS, ecommerce, and Bitcoin investments at Craft. He sits on the boards of Bitgo, Fold, Klue, Lightning Labs, Sendoso, Sonar, and Sphinx.

has been promoted to partner and COO at Craft, and leads the investment team. Brian is focused on B2B SaaS, ecommerce, and Bitcoin investments at Craft. He sits on the boards of Bitgo, Fold, Klue, Lightning Labs, Sendoso, Sonar, and Sphinx. Lainy Painter has been promoted to Partner and continues her focus on software and marketplaces for vertical markets such as real estate, healthcare, education, construction, and financial services. She is a board member or observer for Plume, Trusted Health, Instawork, and Northspyre.

has been promoted to Partner and continues her focus on software and marketplaces for vertical markets such as real estate, healthcare, education, construction, and financial services. She is a board member or observer for Plume, Trusted Health, Instawork, and Northspyre. Bryan Rosenblatt has been promoted to Partner and continues his focus on building the firm’s East Coast portfolio. He sits on the boards of Datasembly, Snackpass, Soundstripe, and Superplastic, and works closely with ClickUp, Copy.ai, Joe Coffee, Scratchpad and SnackMagic.

has been promoted to Partner and continues his focus on building the firm’s East Coast portfolio. He sits on the boards of Datasembly, Snackpass, Soundstripe, and Superplastic, and works closely with ClickUp, Copy.ai, Joe Coffee, Scratchpad and SnackMagic. Michael Tam has been promoted to Partner and continues his focus on SaaS and marketplaces while building the firm’s SoCal portfolio. He sits on the boards of Bbot, Cabana, Dray Alliance, Route, Trellis, and Vendr and works closely with Pipe, Salted, Shef, and Sync.

THE ROAD AHEAD

With the expansion of our team and the closing of our third venture fund and first growth fund, Craft is poised to double down on our mission to partner with the most promising early-stage and growth-stage software founders. We look forward to continuing our focus in areas we know well — SaaS and Marketplaces — and dedicating even more resources to help support the next generation of iconic companies.