Interplay Raises $45M for Third Fund Targeting B2B Marketplaces and Vertical Software

Interplay Closes $45M Fund for B2B Marketplaces and Vertical Software

New York-based venture capital firm, Interplay, has successfully raised $45 million for its third fund, targeting investments in B2B marketplaces and vertical software. The firm specializes in Series A stage investments and aims to support companies digitizing areas that have previously been overlooked due to economic constraints. With this new fund, Interplay plans to invest in 20 companies, injecting $1 million to $2 million per check. The firm has already deployed 40% of the fund, including recent investments in construction tech companies, OnSiteIQ and Roofr.

Specialization in the Marketplace Industry

Interplay founder and managing partner, Mark Peter Davis, highlights the major shift towards specialization in the marketplace industry over the past decade. New companies are now competing with legacy horizontal platforms by offering tailored solutions specific to particular industries. Interplay recognizes this trend and has achieved success by investing in companies that provide specialized services.

Interplay’s Standout Factors

Interplay’s unique approach sets it apart from other venture capital firms. Firstly, its limited partners and founders have the same team of general partners making investment decisions, ensuring consistency and trust in the decision-making process. Secondly, Interplay offers an outsized value proposition relative to the size of its investments. Lastly, the firm’s studio enables it to incubate and start companies, expanding its reach and creating a continuous flow of potential investment opportunities.

Raising Funds in a Challenging Market

The fundraising landscape has been difficult for both companies and VC firms, but Interplay managed to secure its $45 million fund despite market challenges. Davis attributes this success to the hard work of the team and the firm’s decade-long dedication. While the Series A stage has been affected by market shifts, Interplay remains optimistic, seeing many promising companies with improving performance indicators raising funds at reasonable valuations.

Disciplined Capital Deployment

Interplay maintains discipline in deploying its capital, staying cautious amidst higher valuations during the investment boom. The firm deliberately passed on opportunities that reflected over-excitement in the market. However, with company valuations returning to reasonable levels, Interplay believes it is an attractive market for investment, setting companies up for continued success.

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