Venture capital firm closes US$14.5m fund to invest in solutions for underserved populations

A US pre-seed and seed stage venture capital firm has announced a US$14.5m fund to invest in software solutions for underserved populations.

Beta Boom has closed a US$14.5m Fund II raised by managing partners, Kimmy and Sergio Paluch, and limited partners including Ally Bank, Pivotal Ventures (A Melinda French Gates Company), Bank of America and Atento Capital.

The fund is hoped to support early-stage start-ups that address the most critical needs of the fastest-growing, yet least-served populations.

“The closing of this fund allows us to continue investing in software start-ups that not only solve real and meaningful problems, but that also have strong market potential,” said Kimmy Paluch, co-founder and managing partner of Beta Boom.

“We see the greatest needs and opportunities in fintech, digital health and the future of work, and that’s where Beta Boom’s focus remains.

“We’ve always seen ourselves as somewhat of outliers in the VC space, and we have so much conviction in that. Not only have we created a sourcing strategy that’s purpose-built to identify incredible founders outside major tech hubs like Silicon Valley, but we are also ludicrously hands-on in the way we support our founders – because our investment in their success is driven by purpose.”

Erin Harkless Moore, senior director of investments at Pivotal Ventures, said: “Beta Boom is doing something different. We’ve been impressed by Kimmy’s deep experience and relationships, allowing the team to have steady, individualised support for their founders.

“Their unmatched growth mindset gives them flexibility to learn absorb and adjust in an unpredictable ecosystem.”

Beta Boom aims to look beyond referral networks and major tech hubs, focusing across America’s Heartland. The company says prospective investments are evaluated on more than 30 dimensions across five categories.

In hopes of taking a closer look at pedigree bias, the VC firm conducted an analysis of the top 10 venture capital firms. After analysing more than 800 seed investments made throughout the last five years, they found that 69 per cent of investments were linked to pedigree.

“Many of our founders tell us that Beta Boom is the first time they feel like they’ve been taken seriously – which is both encouraging and disconcerting at the same time,” said Sergio Paluch, co-founder and managing partner of Beta Boom.

“We don’t care about a founder’s professional background or location; what we’re truly looking for is someone who has persevered in the face of adversity.

“Founders who are intimately connected to the problem they are trying to solve not only have a proven track record, but also have the power to become the next generation of unicorn founders – if given the opportunity.”

Emily Brown, co-founder and CEO of Attane Health, said: “Beta Boom’s approach is truly unique and special. Time and time again Kimmy and Sergio demonstrate their roles as true partners and champions, and not only because they provide critical, actionable support, but also because they see the potential and greatness in founders when they often struggle to see it themselves.

“Simply put, Beta Boom sets a new standard for the relationship investors need to have with their portfolio companies.”

Beta Boom has already invested in 20 companies, supporting impact-driven companies, such as the perinatal mental health support platform Canopie and the digital health and e-commerce platform Attane Health.