Beta Boom has recently closed its $14.5 million Fund II, with investments from Ally Bank, Pivotal Ventures (A Melinda French Gates Company), Bank of America, and Atento Capital, among others. This new fund will focus on supporting early-stage startups that address the needs of rapidly growing but underserved populations, particularly in fintech, digital health, and the future of work sectors.
The venture capital firm, known for its investments in startups like Canopie and Attane Health, which operate within the healthcare and women’s health space, takes a distinctive approach to investing. Beta Boom emphasizes the importance of founder qualities such as perseverance and grit over traditional success indicators like pedigree, aiming to reduce bias in the investment process.
“The closing of this fund allows us to continue investing in software startups that not only solve real and meaningful problems, but that also have strong market potential. 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,” said Kimmy Paluch, Co-founder and Managing Partner of Beta Boom. “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.”
The involvement of Pivotal Ventures as a Limited Partner in Fund II highlights the organizations’ shared interest in fostering innovation in underserved markets. Erin Harkless Moore, Senior Director of Investments at Pivotal Ventures, commented: “Beta Boom is doing something different. We’ve been impressed by Kimmy’s deep experience and relationships, allowing the team to have steady, individualized support for their founders. Their unmatched growth mindset gives them the flexibility to learn, absorb, and adjust in an unpredictable ecosystem.”
Beta Boom’s evaluation process for potential investments involves assessing founders on more than 30 dimensions across five categories, with a significant focus on team execution and founder qualities. The firm actively seeks to counteract the industry’s bias towards founders with conventional backgrounds by deducting points for attributes related 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. 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,” said Sergio Paluch, Co-founder and Managing Partner of Beta Boom. “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.”
With the launch of Fund II, Beta Boom plans to continue its mission of investing in impactful companies across America’s Heartland, providing essential support to startups that offer scalable solutions to critical needs.
