Exclusive: How emerging manager Overture VC raised $60 million—yes, in this economy

Obvious, I know, but it bears repeating—if you’re a VC, especially an emerging manager, you’re contending with high interest rates, anxious LPs, and far-reaching economic uncertainty while trying to raise millions. 

So, who’s succeeding right now, and how? Here’s one case study: Overture VC has raised its debut $60 million fund to focus on climate tech, Fortune has exclusively learned. Though this is the firm’s first fund, Overture’s founders have been investing along the way as they’ve brought in LPs. They have a few principles they’re following which they shared with Term Sheet about what’s working now. 

Rule number one: Don’t get too caught up in the macro, said Shomik Dutta, Overture managing partner and cofounder, who paraphrases economist John Kenneth Galbraith. 

“It’s that Galbraith line, that there are two kinds of people: people who don’t know and people who don’t know yet that they don’t know. So our job is to find really great companies, at reasonable valuations, and to back them in up and down markets, because there are a lot of things we can’t control.”

Dutta and his Overture cofounder Brandon Hurlbut decided to start Overture over beers on a roof in 2022, formally launching in 2023. But their relationship goes further back. 

You could say it all started with tears—Dutta and Hurlbut met working on former President Barack Obama’s 2008 campaign, and first connected in the month leading up to the night Obama lost the New Hampshire primary to Hilary Clinton. The tears were short-lived: They’d both go on to work in the Obama White House. This set up their pitch to both founders and LPs today—that they have unique experience working in government. 

“An early stage company isn’t going to understand how to navigate all of that,” said Hurlbut. “That’s where we can come in and add that value. That’s a huge differentiator for us, as we’re raising money.”

Rule number two: Expertise matters. Among the founders Overture’s worked with so far, the three that Term Sheet spoke to agree: Navigating red tape on the federal and state levels is something they are eager for help with. Alfred Johnson, CEO and cofounder of Crux Climate (in Overture’s portfolio) said that “we’re in a new phase” where startups are thinking about regulatory concerns earlier than in years past. Why is it so hard for startups and the government to get on the same page?

“Governments work at a very different pace, and oftentimes work that they do is built on many years of foundations,” Joselyn Lai, CEO and cofounder at Bedrock Energy, an Overture portfolio company. Day-to-day startup life stands in sharp contrast, where you’re thinking in weeks and months rather than decades, she added.

So, most Silicon Valley founders don’t come into climate tech startups with government experience, and for Andrew Ponec, CEO and cofounder of Antora Energy, that was certainly the case. Antora was Overture’s first investment, and Ponec says that learning how to talk to lawmakers from the firm has made him “feel totally comfortable when I’m headed out to D.C.”

Rule number three: Build a track record as much as you possibly can. For LPs, the other selling point of Overture is that the firm has been investing as it goes, proving its thesis and slowly building the case for its own existence. 

“They’re so well-networked and they were getting pulled into some of the best deals early, but then were able to accelerate those businesses by giving them that deep regulatory expertise,” said Kiran Bhatraju, an Overture LP and CEO and cofounder of climate software company Arcadia. 

Other LPs include Insight Partners managing director Deven Parekh, who personally invested in Overture, WovenEarth Ventures, and Schneider Electric’s corporate venture arm, SE Ventures. 

“They already had a portfolio,” said Amit Chaturvedy, global head of SE Ventures. “The diligence part for us was more straightforward because we could look at a multi-year track record and say, ‘can they spot winners in the market?’”

They’ve also put their own skin in the game. Overture’s GPs have committed 5% to their own fund. That group includes Dutta, Hurlbut, their fellow Overture cofounders Michael O’Neil and Tamim Mourad, along with executives from Boundary Stone, the government affairs firm that Overture has formally partnered with.

It’s important to note that Overture hasn’t reinvented the wheel here. Youngrok Kim, head of investment at GREE LP Fund, says that the invest-as-you-go strategy is what he recommends to emerging managers. Other firms also present their regulatory experience as a value-add to cap tables, though Overture’s very direct government experience is, however, less common, Kim added. 

But you can’t argue with success—Kim says $60 million is a “compelling” size by today’s standards. And when raising money is tough, Overture’s specific niche and strategy has helped the new firm find a path in an environment where so much is still unclear. 

“Any founding partner at a venture fund will tell you that [raising a new fund] is the fastest highway to empathy for founders that have to raise capital all the time,” said Dutta.

See you tomorrow,

Allie Garfinkle
Twitter: @agarfinks
Email: alexandra.garfinkle@fortune.com
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Joe Abrams curated the deals section of today’s newsletter.

VENTURE DEALS

- MMI, a Pisa, Italy-based developer of microsurgery robotics, raised $110 million in Series C funding. Fidelity Management & Research Company led the round and was joined by Deerfield Management, RA Capital Management, Biostar Capital, Andera Partners, and others..

- Recogni, a San Jose, Calif. And Munich, Germany-based AI-based computing company, raised $102 million in Series C funding. Celesta Capital and GreatPoint Ventures led the round and were joined by Mayfield, DNS Capital, BMW i Ventures, SW Mobility Fund, and others.

- Oula, a Brooklyn, N.Y.-based maternity care clinic, raised $28 million in Series B funding. Revolution Ventures and Maverick Ventures led the round and was joined by GV, Female Founders Fund, 8VC, Alumni Ventures, and Great Oaks.

- Astrotalk, a New Delhi, India-based astrology platform, raised $20 million in Series A funding from Left Lane Capital.

- AZmed, a Paris, France-based developer of AI technology designed to automatically detect fractures in X-rays, raised €15 million ($16.2 million) in Series A funding from Maison Worms, Techstars, and others.

- Insamo, a Berkeley, Calif.-based biotechnology company discovering membrane-permeable and orally available cyclic-peptides, raised $12 million in seed funding from Playground Global, venBio, and MRL Ventures Fund.

- Loora, a Tel Aviv, Israel-based conversational AI platform designed to help users learn fluent English, raised $12 million in Series A funding. QP Ventures led the round and was joined by Hearst Ventures, Emerge, Two Lanterns Venture Partners, and others.  

- Novity, a San Carlos, Calif.-based developer of predictive maintenance AI technology for machines, raised $7.8 million in funding. WERU Investment led the round and was joined by Myriad Venture Partners and others. 

- Pulsate, a Madison, Wis.-based provider of a mobile-first member engagement platform for financial institutions, raised $7.8 million in Series A funding from TruStage Ventures and Curql Collective.

- EngineEars, a Los Angeles, Calif.-based developer of music collaboration and business management processes software, raised $7.5 million in seed funding. Drive Capital led the round and was joined by Slauson & Co., 645 Ventures, FLUS Investment Group, and others.

- Ziplines Education, a San Francisco Bay Area-based company that provides universities with certificate courses in tech-adjacent fields, raised $6.4 million in Series A funding. Jackson Square Ventures led the round and was joined by Wildcat Venture Partners and WGU Labs.

- PriyoShop, a Bangladesh-based B2B retail marketplace for micro, small, and medium-sized businesses, raised $5 million in pre-series A funding. Century Oak Ventures led the round and was joined by Evolution Ventures, Iterative, SOSV, GFR Fund, BonBillo, Accelerating Asia, South Asia Tech Partners, and Voltity.

- UnityAI, a Nashville, Tenn.-based developer of AI technology designed to streamline hospital operations, raised $4 million in seed funding. Max Ventures led the round and was joined by Whistler Capital Partners, Nashville Capital Network, and others. 

- Juniper, a London, U.K.-based reproductive health care insurance provider, raised £1.5 million ($1.9 million) in pre-seed funding. Insurtech Gateway led the round and was joined by 2100 Ventures, Exceptional Ventures, Heartfelt, and angel investors. 

- SigScalr, a Boston, Mass.-based unified application observability platform, raised $1.8 million in pre-seed funding. Scribble Ventures led the round and was joined by WestWave Capital and Forward Slash Capital.

PRIVATE EQUITY

- An investment group led by Stone Point Capital and Clayton, Dubilier & Rice agreed to acquire a majority stake in Truist Insurance Holdings, a Charlotte, N.C.-based insurance brokerage, in a deal valued at $15.5 billion. 

- Aero Accessories & Repair, a portfolio company of ATL Partners, acquired AOG Accessories, a Miami, Fla.-based repairer of components in fuel, hydraulic, pneumatic, and power generation systems. Financial terms were not disclosed. 

- Apollo Intelligence, a portfolio company of Frazier Healthcare Partners, acquired GlocalMind, a Plano, Texas, London, U.K., and Bangalore, India-based healthcare market research services and panel company. Financial terms were not disclosed. 

- Aquiline Capital Partners and Level Equity acquired a majority stake in DocuPhase, a Tampa, Fla.-based provider of software designed to streamline invoicing and payment procedures for finance teams. Financial terms were not disclosed. 

- CIVC Partners acquired a majority stake in Highstreet IT Solutions, a Rockville, M.D.-based Oracle implementation and managed services provider. Financial terms were not disclosed.

- S.i. Systems, backed by Cornell Capital and TorQuest Partners, acquired HVN Solutions, a Toronto, Canada-based IT consulting firm. Financial terms were not disclosed.

- Society Brands acquired Clarifion, a Newport Beach, Calif.-based provider of air ionizers and purifiers, and Cleanomic, a Henderson, Nev.-based provider of sustainable cleaning, laundry, kitchen, and bathroom products. Financial terms were not disclosed.

OTHER

- Walmart (NYSE: WMT) agreed to acquire Vizio (NYSE: VZIO), an Irvine, Calif.-based smart TV designer and retailer, for $2.3 billion.

- Xalts acquired Contour Network, a Singapore-based company that connects global banks to businesses to digitize trade. Financial terms were not disclosed. 

PEOPLE

- First Reserve, a Houston, Texas and Stamford, Conn.-based private equity firm, hired Todd Tomlin as managing director. Formerly, he was with Turnbridge Capital Partners.

- Flourish Ventures, a San Francisco, Calif. -based venture capital firm, hired Matt Kelly and Crystal Sun as senior investment analysts and Jana Ahmed Aboughaly as an investment analyst.

- Ironspring Ventures, an Austin, Texas-based venture capital firm, hired Max Adelman as an investment associate. Formerly, he was with Morgan Stanley.