VC Firm Greycroft Raises $680M In Search Of Next Venmo, Subscription Startups

Challenger Banks Raise The Stakes (And The Cash)

Venture capital firm Greycroft, based in New York and Los Angeles, has raised $680 million to fund new startups, according to Bloomberg, looking for “the next Bumble or Venmo.”

The firm plans to invest $310 million in early-stage startups and $370 million in growth-stage startups, the report stated.

Axios Media, mobile games publisher Scopely and the Gwyneth Paltrow-started lifestyle startup Goop are all among Greycroft’s existing profile.

Co-Founder and Partner Dana Settle said the firm plans to keep investing in retail-oriented businesses, although it’s also interested in working with health technology, financial technology and grocery-related businesses, Bloomberg reported. Media assets like The Huffington Post will likely be less of a focus going forward, Settle said.

She said the firm will be looking at businesses with subscription models and less at those with ad-based models, which have run into problems as of late. And Settle said the recent rise of special purpose acquisition companies (SPACs) has made sense to her, with it being a good idea for some companies to pursue that route.

Greycroft Co-Founder and Partner Ian Sigalow said it is surprising how quickly the initial public offering (IPO) market has recovered amid the pandemic, adding he is still skeptical of the “frothy” nature of valuations, particularly with how volatile most facets of the market still are, Bloomberg reported.

IPOs had fallen after the initial onset of the pandemic. But after several months of slowing down, IPOs began to flood the market again. SPACs began to trend upward later in the summer as companies looked to save time and money.

Some experts, including MerchantE Chief Financial Officer Shim Steinmetz in a PYMNTS interview that the numerous uncertainties in the near term, including the November elections, the unknown factor of a vaccine, and the continuing threat of the pandemic, make it hard to say whether a recovery will come by next year.