.406 Ventures secures $265 million for its fifth fund


.406 Businessesa Boston-based venture capital firm that invests in business-focused startups in healthcare, data, AI and cybersecurity, closed its fifth fund with $265 million in commitments in capital.

The company was founded by Liam Donohue, founder of Boston-based venture capital firm Arcadia Partners, and two other partners, including Maria Cirino, co-founder of managed security services company Guardent, and the former CFO of Razorfish , Larry Begley.

The new fund is supported by a group of new and existing sponsors, including university endowments, foundations, pension plans and strategic investors. Including the new fund, the 18-year-old firm has raised more than $1.4 billion across its five core funds and three opportunity funds.

.406 Businesses, venture capital

.406 Ventures Investment Team: Standing, left to right, Graham Brooks, Greg Dracon, Liam Donohue, Payal Agrawal Divakaran, Kathryn Taylor Reddy and Kevin Wang. On their knees, from left to right, Austin Kwoun and Rebecca Redfield. Image credits: .406 Businesses

It’s been a while since TechCrunch caught up with the firm. Speaking to Donohue recently, he said .406 Ventures’ focus hasn’t changed much during that time. The company continues to invest in these same three sectors and takes advantage of Boston Tech Ecosystemeven if it invests nationally.

However, unlike some of the firm’s previous funds, Donohue is seeing more and more repeat founders returning for new investments.

“We wanted to be a partner for a founder to come back to us for their next business,” Donohue told TechCrunch. “In funds one and two, we had a few repeat founders. In the newer funds, I’m thrilled to see so many great and loyal partners returning as a third of the fourth fund were repeat founders, and I would expect much the same in the fifth fund.

Over the course of two decades, the firm has built a portfolio of 87 companies, many of which have gone private or gone public. More recently, these include Iora Health, acquired by OneMedical in 2021 and now part of Amazon Health. Behavioral health company AbleTo is part of Optum Health. In the meantime, Carbon black And CloudHealth Technologies are part of VMware while cybersecurity insurance company Corvus was acquired by Travelers in 2023.

.406 Ventures has already invested in four companies in the new fund, including Portrait Analytics, the developer of a generative AI platform for investment research and thesis creation. With this new fund, it will invest in more than 20 companies, Donohue said.

When looking at startups across the three verticals of healthcare, data and AI, and cybersecurity, the company considers a number of factors, like infrastructure plan, especially now that AI is everywhere. It also draws on the executive advice of more than 100 C-suite operators from Fortune 500 companies.

“We ask ourselves: ‘What are the new technologies that will need to be protected or that will enhance and modify the threat factors?’ » said Donohue. “We always look three to five years out and anticipate where the vulnerabilities will be and who will put the protections in place for that.”


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