John Pletz | Crain’s Chicago Business
New World Ventures, the venture fund run by J.B. and Tony Pritzker, is getting a makeover and broadening its mission.
The fund, which has been the most active venture investor in local startups in recent years, is changing its name to Pritzker Group Venture Capital. The new name more closely identifies the venture fund with its corporate parent. New World, founded in 1996, predates the formation of Pritzker Group by the two brothers in 2002.
The venture fund is the smallest of three units of Pritzker Group, which also includes a private-equity business that acquires and operates mature companies and an asset-management group that invests in hedge funds and other investments.
The Pritzker brothers also plan to step up the amount of capital they put toward venture deals, and they’re looking to do more later-stage investments.
“We are allocating more to venture than we ever have before,” J.B. Pritzker said, though he declined to specify the amount of capital involved in Pritzker Group or its various funds.
New World was best-known for investing in Chicago tech startups, such as BrightTag, as those companies were just starting out. Such early-stage deals tend to be less than $5 million. But it’s also done late-stage deals, larger investments in companies that are farther along. Last year, New World invested $50 million in Phoenix-based IO Data Centers LLC. In 2011, the firm invested $16.5 million in Chicago-based SMS Assist, which uses software to schedule facilities maintenance for companies with multiple properties.
“Unlike a lot of early-stage funds, we’re able to write a double-digit million-dollar check,” Mr. Pritzker said. “There are a larger number of companies that need to raise larger rounds but not a lot of local investors.”
Mr. Pritzker isn’t the only one talking up the merits of later-stage investing, which carries high price tags but lower risk. Last week, it was Andreesen Horowitz. And Chicago-based Lightbank, which started out doing the earliest-stage deals, also has talked about the opportunity to do bigger investments.
The Pritzkers, who have put more than $400 million in more than 100 venture investments, have been ratcheting up their profile and reach. More than a year ago, New World opened an office in Los Angeles, and it’s partnered with a veteran venture capitalist in New York to look for deals there. Although 30 percent of New World’s deals have been in Chicago, 20 percent have been in Silicon Valley or San Francisco, with the rest scattered across the country, Mr. Pritzker said.