Revolution Growth announces $525 million in new investment funds

Revolution Growth on Tuesday announced a new, $525 million investment fund, Revolution Growth III.

Led by investors Steve Case, Donn Davis and Ted Leonsis, the fund will build upon efforts of the previous Revolution Growth fund of $450 million, launched in 2011.

According to the Washington, D.C.-based company, the new fund will invest capital in businesses outside of Silicon Valley that are leveraging technology and new models to disrupt existing, multibillion-dollar industries.

Revolution Growth III will be selective, echoing past growth funds, which have made just three to four investments a year, typically investing $25million to $50 million in each situation.

This approach enables the firm’s partners to assist the companies they back, which are taking on major sectors such as health care, education, transportation, energy, financial services, food and government services. These companies include Revolution Foods, Bedrock Manufacturing (Shinola and Filson), Optoro, CustomInk (based in Fairfax), Handy and sweetgreen, all investments from the previous Revolution Growth fund.

Revolution said the most successful companies in the next wave of investments will be those that understand the importance of forming partnerships with outside organizations and those that have a fluent grasp of the policy issues they will encounter.

“Revolution Growth was created out of a belief that with the right idea, team,and partners, there is significant opportunity to build innovative, built-to-last companies, not just in Silicon Valley but all across the country,” Steve Case said in a statement.

“While the investment pace has recently slowed somewhat in Silicon Valley, we believe the pace is poised to accelerate in Rise of the Rest regions. We look forward to joining forces with the next generation of entrepreneurs looking to transform significant aspects of our lives, and build great companies in the process.”

Case visited Richmond in May 2015 as part of his Rise of the Rest tour in the South.  During a pitch competition, WealthForge edged out seven other Richmond area startups to win a $100,000 investment.

With this new fund, plus the previous Revolution Ventures fund, the Revolution Funds now exceed $1.1 billion in committed capital.

The new fund is announced in conjunction with an expansion of the Revolution Growth investment team. In January, Steve Murray, a 20-year venture capital veteran at Softbank, joined as a partner, and two previous investment team members, Scott Hilleboe, and Evan Morgan, were promoted to partner. Vice Presidents Kristin Gunther, Ashley Larson and Chris Hughes also joined the firm in the last fall along with associate Patrick Conroy.