Work-Bench, New York’s Leading Corporate Tech Start-Up Scene Donor, Raises $ 100 Million Third Fund

Jonathan Lehr and Jessica Lin started Work-Bench from humble beginnings in 2013. Although both come from tech-related backgrounds, neither has worked at a high-profile startup or angel investment in the next big software IPO. And their bet – that they could support a seed fund focused on connecting New York’s burgeoning corporate tech community with corporate clients – didn’t have Silicon Valley venture capitalists. awake at night.

But Work-Bench raised $ 10 million and opened a hub for such rickety IT infrastructure and business software as a home base; Through executive briefings and large community meetings, Lehr and Lin worked to deliver the promised added value. In 2018, they hit a level with a fund of $ 48 million. And now Work-Bench has raised a third fund of $ 100 million to drive more investments in startups from the early stages.

“We invest at that point where other VCs can see a product, but they can’t analyze any SaaS metrics, that’s often before revenue,” says Lehr. “We use our corporate network and our theses to get convictions and energize them to bring them to market with a pipeline value of millions of dollars. “

(Midas Touch newsletter subscribers got a first look at Work-Bench’s fund and partner strategy on Saturday. Sign up here.)

With the funding, the founders of Work-Bench plan to stay focused on New York City, with 70-80% of startups supported to be based in the country’s largest city (but not, historically, its tech hub). This time around, Work-Bench may attempt to take the biggest check out of an initial investment of $ 3-6 million, by working more closely with companies and joining their boards, according to the partners.

As other companies speed up their fundraising timelines, Work-Bench hopes to take an “anti-FOMO” approach, investing only in 17 or 18 companies per three-year fund cycle. The company has no immediate plans to add anything like an opportunity fund, but Lehr says the company has shared later stage opportunities in the past with its own LPs.

Lehr and Lin bring a less flashy, yet company-friendly experience to managing the small Work-Bench team. A veteran of the Morgan Stanley CIO office, Lehr says he has assessed hundreds of tech companies as potential partners or tools for the finance company. He launched NY Enterprise Technology Meetup in January 2012. Lin spent two years at Cisco Systems in Boston, working as a learning and development manager alongside engineers (she is now Forbes donor). At the time, the New York scene was dominated by early players such as MongoDB, which went public in 2017, and ad tech stars like AppNexus and DoubleClick, both of which were acquired.

“We thought the next wave was going to be business because you had customers here and you had deep cuts in infrastructure coming from [them] to create business startups. And there is no better place to do it, ”says Lehr.

The ecosystem has accelerated rapidly since. When Work-Bench announced its second fund in late 2018, the company boasted that $ 6 billion had been invested in New York-based business startups by venture capitalists over the previous five years. In 2020, this ecosystem alone raised $ 5.8 billion. In the first half of 2021, it reached $ 6.7 billion, out of 119, according to the company’s recent report.

Work-Bench’s portfolio includes emerging successes such as Cockroach Labs, valued at $ 2 billion, and Socure, valued at $ 1.3 billion; CoreOS, Semmle, Algorithmia and Backtrace have all been acquired. Spring Health, which recently raised $ 76 million from Tiger Global, as well as Arthur, Catalyst and FireHydrant.

Raising new funds during the pandemic hasn’t been easy for Lehr and Lin, however. The duo have been asked multiple times about how Covid-19 and the push towards remote working would affect their geography-focused thesis and events. But while Work-Bench has moved some programming to virtual in recent months and reduced its own office space (meetings now take place on the Amazon Web Services site, among others), the New York startup community has retained some of his “hometown pride”, Lehr argues. Four of the top five investments in the company’s new fund are based in New York City.

This means that Work-Bench plans to continue its small meetings for business leaders (the company claims to have tied its portfolio to “tens of millions of dollars” of contracts) and community building, not out of charity, but to support the fund, too. “We call it a full circle of our community model, built into the venture capital fund,” says Lin.

One area where the company hopes to see changes: the diversity of this corporate network. Around 20% of Work-Bench’s portfolio is now founded by women. The company maintains a public directory, the database of women founders of start-ups, to try to help; it also hosts a series of “#Womenenterprise” events. “We’re really proud of it, but we know there’s still a lot of work to be done,” says Lin. But the challenge has “many more mountains to climb”.

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