A* Capital Closes $450 Million Fund III, Targets AI and Fintech Startups
The early-stage venture firm continues its generalist approach across AI applications, healthcare, and security sectors, following a trajectory of consistent fundraising since its 2020 inception.
Early-stage venture firm A* Capital has officially closed its third fund, raising a total commitment of $450 million. The firm, which was established in 2020 by serial entrepreneurs Kevin Hartz and Bennet Siegel, plans to deploy this capital over the next two to three years. The strategy involves backing at least 30 startups, with average investment checks ranging between $3 million and $5 million.
Investment priorities for Fund III include artificial intelligence applications, fintech, healthcare, and security. The firm maintains a generalist approach, supporting companies across these diverse categories. This announcement follows the firm's previous fundraising rounds, including a $315 million Fund II in 2024 and a $300 million Fund I in 2021, demonstrating a consistent ability to secure significant capital in the current market environment.
The fund has secured limited partners comprising nonprofits, foundations, and endowments. Carnegie Mellon University is among the publicly named backers supporting the new vehicle. This mix of institutional support reflects the firm's reputation for identifying high-potential ventures in a shifting financial landscape where US money market rates have stabilised following the aggressive hikes of 2022.
Managing partner Kevin Hartz has highlighted a continued focus on young founders as a core tenet of the firm's strategy. Approximately 20% of the firm's current portfolio involves teenage entrepreneurs, a practice that has become more prevalent in the industry in recent years. Hartz, best known for co-founding Xoom and Eventbrite, brings significant experience from previous exits, including PayPal's acquisition of Xoom for $1.1 billion in 2015.
Among the firm's notable past investments are the fintech company Ramp and the artificial intelligence firm Mercor. While the specific list of startups targeted for investment in Fund III has not been disclosed, the firm intends to continue its track record of supporting early-stage innovation. The deployment timeline remains within the stated two to three year window, with no specific quarterly targets provided at this stage.
