.406 Businessesa Boston-based venture capital firm that invests in healthcare, data and artificial intelligence, and cybersecurity startups has closed its fifth fund with $265 million in capital commitments.
The company was founded by Liam Donohue, who was the founder of Boston-based Arcadia Partners, and two other partners, including Maria Cirino, co-founder of security management services company Guardent, and former Razorfish CFO Larry Begley.
The new fund is supported by a group of new and existing limited partners, 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 from its five core funds and three opportunity funds.
.406 Ventures Investment Team: Standing, from left, Graham Brooks, Greg Dracon, Liam Donohue, Payal Agrawal Divakaran, Kathryn Taylor Reddy and Kevin Wang. Kneeling, from left, Austin Kwoun and Rebecca Redfield. Missing from photo: Trip Hofer. Image Credits: .406 Businesses
It’s been a while since TechCrunch caught up with the company. Speaking with Donohue recently, he said the focus of .406 Ventures hasn’t changed much during that time. The company continues to invest in these three industries and leverage Boston’s tech ecosystem, although it invests nationally.
However, unlike some of the firm’s previous funds, Donohue is seeing more repeat founders return for new investments.
“We wanted to be a partner for a founder to come back to us for their next thing,” Donohue told TechCrunch. “In funds one and two, we had some repeat founders. In the most recent funds, I’m excited to see so many great repeat partners coming back that a third of fund four were repeat founders, and I’d expect about the same in fund five.”
Over two decades, the firm has amassed a portfolio of 87 companies, many of which have gone public or gone public. More recently, it includes Iora Health, which was acquired by OneMedical in 2021 and is now part of Amazon Health. Behavioral health company AbleTo is under Optum Health. Meanwhile, Carbon Black and CloudHealth Technologies are part of VMware, while cybersecurity insurer Corvus was acquired by Travelers in 2023.
.406 Ventures has already made investments in four companies from the new fund, including Portrait Analytics, the developer of an artificial intelligence platform built for investment research and thesis generation. It will invest in more than 20 companies with the new fund, Donohue said.
Looking at startups in the three verticals of healthcare, data and AI, and cybersecurity, the company takes into account a number of factors, including infrastructure planning, especially now that AI is everywhere. He also sits on the executive boards of more than 100 C-suite executives from Fortune 500 companies.
“We’re asking, ‘What are the new technologies that will either protect or enhance and change the threat actors?’ Donohue said. “We’re always looking three to five years out and anticipating where the vulnerabilities are going to be and then who’s building the protections for that.”
