Dcode Capital, a women-led venture capital firm based in D.C., has raised $19 million for its inaugural fund to invest in tech startups looking to break into government contracting.
The goal for Dcode Capital's Fund I LP, launched in April 2022, is $30 million. So far 23 investors have contributed.
Rebecca Gevalt, a managing partner at Dcode Capital, told me fund has already invested in five startups across the country, including Arlington-based data analytics firm Stardog and Berkeley, California-based UrbanFootprint.
She said the investments range between $1 million and $2 million and that the fund is targeting "dual-use" startups — those that operate in the public and private sectors — that are in the "late" Series A to Series C range of funding.
"We want to see a company that's mature enough in the private sector to, quite frankly, survive the federal contracting process," Gevalt said Monday. "We don't want companies dying on the vine going after the fed space."
Dcode, a D.C.-based tech accelerator and advisory firm for startups looking to get into the government contracting sector, launched Dcode Capital in 2019 as a separate entity to offer investments directly into many of the startups that graduated from its eight-week business accelerator. Over 200 companies have gone through this program since its founding in 2015.
When Fund I launched two years ago, Gevalt and her co-founders were targeting a $50 million investment vehicle, but softness in the capital markets led them to downsize the offering, she said. Still, she noted that a $30 million fund is rather large for an inaugural effort and she thinks a lot of that has to do with there being sustained interest in investments in startups working in the government sector.
"We're seeing a shift in perception, I would say, by both tech companies and their investors to the government market being much more interesting," Gevalt said.
That interest also came from an institutional investor for the first time back in September 2023 when Dcode Capital received an investment from the Project Spark program, which is run by J.P. Morgan Asset Management, the wealth and asset management arm of JPMorgan Chase & Co. (NYSE: JPM). The sum wasn't disclosed, but the fact that the nation's largest and most prominent bank is an investor has certainly lent credibility to the fundraising effort.
"We're able to say we're validated by JPMorgan," Gevalt said.
