Lefkofsky raises a second fund at Lightbank

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Eric Lefkofsky, one of Chicago’s most prolific tech entrepreneurs and investors, has reloaded his venture capital fund, Lightbank, raising $180 million.

Lightbank was the fourth-most active venture investor in Chicago between 2010 and 2020, according to PitchBook data. It was an early investor in Chicago companies Sprout Social, a software company that went public in late 2019, and Tastytrade, an online options-trading and education company that is being acquired for $1 billion.

Lightbank’s second fund is the same size as its first. Lefkofsky and longtime backer New Enterprise Associates, one of the world’s largest venture funds, are contributing about one-third of the capital each, he said. The rest comes from family offices, institutional investors and individual investors.

One change is that Lefkofsky will run the fund without longtime business partner Brad Keywell. Lefkofsky and Keywell took Chicago tech companies Groupon, Innerworkings and Echo Global Logistics public.

“We remain close and connected and are common shareholders in a bunch of companies,” Lefkofsky said of Keywell. “We decided to do Lightbank II differently, so I’m going to devote more time to it and manage it and use it as my passive vehicle to make early-stage investments.”

Keywell, founder of data-analytics company Uptake, says he continues to invest independently in early and late-stage companies.

Lightbank had toyed with the idea of raising another fund at various times but never pulled the trigger. “It was timing, really,” said Lefkofsky, who is perhaps best known for backing Groupon founder Andrew Mason. “We thought about raising money and just never decided to do it.

The first fund did 75 investments, including Chicago companies such as Reverb, which sold to Etsy for $275 million, as well as Benchprep, Cancer IQ, Catalytic, Clearcover, Drivin, Fooda, Hireology, Snapsheet and SpotHero.

“There was a time when I don’t think we knew what Lightbank was going to be and how much time I wanted to commit to it,” said Lefkofsky, who founded Tempus Labs, a life-science and technology company, in 2015. It’s now valued at $8 billion and has nearly 2,000 employees.

Lightbank is run day to day by Mike Mauceri and Eric Ong, joined by Matt Sacks, a startup founder who previously worked at NEA.The fund will continue to do early-stage deals between $2 million and $3 million, but it will do more follow-on investments in portfolio companies. “We’ll follow companies as they get bigger,” Lefkofsky says. “It won’t be atypical for us to have $5 to $10 million, or a bit more, into the winners.”