citybiz+ New Markets’ H1 Report: 1 Exit, 2 New Investments and Closing of $160M Fund

New Markets Venture Partners completed one exit and made two new portfolio investments in the first half of 2023, besides closing a $160 million education fund, the Fulton, Md., firm focused on impact investing has told investors in a newsletter summarising its half-yearly performance.

“It’s been a great first half of 2023 for New Markets,” the venture fund said. “We recently announced our new $160M fund and published our latest Impact Report. This comes on the heels of a strong end to 2022, where we completed the successful sale of another portfolio company and invested in our fifth company in our new fund.”

The lone exit was from LearnPlatform, a provider of technology that enables educators and their institutions to research, select and evaluate the efficacy of digital learning solutions. LearnPlatform was acquired by Salt Lake City, Utah-based Instructure Holdings (NYSE: INST). Founded in 2014, the North Carolina-based firm raised a $3.2 million Series A in which New Markets participated.

New Markets” two portfolio investments were:

PairIn, a workforce software company based in Denver, Colo. New Markets participated in the firm’s $2.1 million Series B. Pairin also secured a $2 million line of credit. “The capital comes amid Pairin’s growing footprint of client success across the nation, where the recession and lingering post-pandemic impacts on workforce and the economy have increased demand for Pairin’s My Journey platform and change management expertise,” New Markets said. Other investors included JFFLabs, Juvo Ventures and Potencia Ventures.

Mantra Health. New Markets participated in a $22 million Series A round for the New York-based clinically informed digital mental health provider for colleges and universities. The startup has additionally raised $5 million in a Series A extension round. Recently, it launched a suite of new products, including self-directed dialectical behavior therapy and emotional wellness coaching resources for students, and signed a partnership with Togetherall to provide a peer-to-peer support network.

In its Impact Report, New Markets evaluated its “solutions and methodology to address key milestones and loss points along the education to employment journey, and the individual and collective accomplishments of the firm’s portfolio companies over the last several years.” It concluded thus: “By pursuing a targeted approach to investing in impactful, evidence-based solutions, the New Markets portfolio companies have generated a measurable improvement in economic mobility for over 72 million Americans.

New Markets is led by co-founders and general partners Mark Grovic and Robb Doub. Each has three decades’ experience in investing and building high-growth information technology and business services companies. The firm eyes the so-called “double bottom line” — a measurable social outcome, in addition to financial profits. Its focus on educational startups has a reason — nearly a third of Americans have no college degree and less than 30% of students have adequate reading and math skills.

In a recent interview with Forbes, Grovic offered another reason why the fund was focused on education and workforce. “The true measure of any society can be found in how it treats its most vulnerable members,” he said, adding: “We have a responsibility to use our talents and assets to help elevate those in need.”

Grovic previously cofounded the online educational firm LifeJourney and the Templeton Emerging Europe Fund. He also served as the VC-in-Residence at the University of Maryland University College’s Smith School and was an award-winning private equity professor for over 20 years. Most recently, he was a professor of Social Entrepreneurship and senior advisor to University of Maryland’s president for Corporate Development.

Doub is an alumnus of Georgetown University’s McDonough School of Business. Prior to starting New Markets, he was managing director of the SEAF Central and Eastern European Growth Fund.

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Education Fund Closing
New Markets Education Partners III, L.P. , closed in February at $160 million, after it was oversubscribed. It was the firm’s fifth fund overall and third fund exclusively focused on education and workforce technology.  In size, it is nearly twice as big as its previous education fund, NMEP II.

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“We are fortunate to have this unique opportunity to provide capital and support to the most deserving mission-driven education and workforce entrepreneurs,” Grovic said at that time. “Over the last three decades, we have accumulated the assets and experience to understand the challenges faced by the nation’s top education and workforce entrepreneurs and to help them overcome these challenges,” he added.

Since its founding in 2002, New Markets has made about 50 portfolio investments and realized $3.3 billion in value for shareholders. Its education startups alone “totaled more than $1 billion in market value and returned over $100 million to limited partners” in the last three years, the firm said.  It has made over a dozen exits.