Frontier Secures $390M For B2B SaaS Investment

B2B e-commerce is on the cusp of a major boom, and as PYMNTS reported last month, it is also fueling the Software-as-a-Service market. Software investor Frontier Capital is hot on the trail of this trend, and has just announced the closing of a fund aimed at investing in B2B SaaS.

The company reported Tuesday (March 3) that it has closed Frontier Fund IV, worth $390 million. The funds, Frontier said, are intended for lower- and middle-market SaaS innovators.

The fund surpassed its target of $300 million, making it the third fund to overshoot its financial goals by Frontier, reports said.

Fund IV will be used to invest funds between $10 million and $40 million to secure majority and minority ownership in B2B SaaS service providers, among other industries including Human Capital Management Software and Services, Managed-IT Infrastructure and Technology-Enabled Services.

In a statement, Frontier managing partner Andrew Lindner described the fund’s closing as “an exciting new chapter” for the company. “It allows Frontier to build upon our reputation as a premier partner for lower middle market growth companies seeking the playbook and capital required to achieve their next phase of growth.”

Small business access to capital is paramount as high interest rates and the drop in big bank loans reinforced the importance of both alternative lenders and venture capitalists in the market.

That, according to Bain Capital Ventures Managing Director Matt Harris, has caused venture capitalists to renew their energy towards B2B investment. “In a sense the venture capitalist followed the entrepreneurs,” Harris told MPD CEO Karen Webster in a recent interview. “You see it with the internet – 5 years ago all anyone wanted to talk about was Facebook and Twitter and now people are talking more about business to business companies like Ariba and Salesforce. What happened in the software world and on the internet is what will happen to the payments space.”