FORTUNE — Texas has the second-largest state economy in the U.S. but, when it comes to venture capital investment, the Lone Star State last year ranked 4th in terms of dollars raised and 6th in terms of the number of companies funded. A big part of the problem has been a relative lack of in-state VC firms and, in particular, new in-state firms that remain committed to early-stage opportunities.
That’s where Austin-based LiveOak Venture Partners is hoping to step in, today announcing that it has closed its debut fund with around $109 million in capital commitments.
The firm was launched in late 2012 by three former Austin Ventures partners — Venu Shamapant, Krishna Srinivasan and Ben Scott– with plans to invest in Texas startups within the IT and tech-enabled services sectors.
“The macro economy in Texas has been doing phenomenally well, but there have been capital constraints for creating new companies,” Krishna Srinivasan says. “That’s why we are very excited to be investing here.”
LiveOak expects that most of its dealflow will come from the SaaS-heavy Austin area, although it considers itself to be a pan-Texas investor.
“Dallas has become very strong in healthcare IT, for example, and has the country’s highest concentration of Fortune 50 companies,” Venu Shamapant explains. “Houston has this really great energy technology niche. We’re not directly a healthcare or energy investor, but are beginning to see a lot of overlap when it comes to technology needs so there are opportunities for us.”
So far, LiveOak has backed five companies, including a pair of seed deals (one of which already has converted into a Series A). They are:
- Disco (SaaS for e-discovery)
- NSS Labs (security search)
- StepOne (contextual self-help and CRM)
- Veros Systems (predictive analytics software)
- Written (content marketing software)
While with Austin Ventures, the LiveOak principals had backed such companies as Mavenir Systems (MVNR), Navini Networks (acquired by Cisco) and Spatial Wireless (acquired by Alcatel-Lucent).
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