Lotus Innovations held a first close on $25 million for Lotus Innovations Fund II, which is targeting $33 million, according to a 4 April regulatory filing with the US Securities and Exchange Commission (SEC).
The firm has also brought on new leadership, with Ommid Bavarian joining as chief financial officer last week.
Lotus has tripled its target for the fund compared with Lotus Innovations Fund I, which closed on $10 million in April 2014. With Fund II, which has a five-year life, Lotus plans to make a total of six to 10 investments in under-valued enterprise IT professional services and software companies, according to the firm's website.
Lotus didn't return requests for comment.
“We are extremely pleased with the success of our inaugural Fund I which delivered a five time return over the S&P500 last year,” said Christian Mack, managing director and partner at Lotus Innovations, on the firm's website. “Our investors were looking for ways to avoid market volatility, and we delivered a double-bonus when we outperformed one of the leading indexes.”
With Fund I, the Irvine, California-based firm focused on transforming small- to mid-size enterprise IT services and telecommunications companies into software as a service (SaaS) companies.
The firm focuses on seed and early-stage investments, and considers investments between $2.5 million and $5 million in each portfolio company. Lotus' portfolio companies include software company gen-E, IT consulting company IQ Logic, and Ramp Consulting, a partner of German software corporation SAP.
The firm is also bulking up its team with the hiring of a CFO, the firm announced on 30 March. “Ommid shares Lotus' passion for helping technology companies reach their goals,” Mack said. Prior to joining Lotus, Ommid, who has 10 years of accounting experience, was a managing member and senior vice president of finance and procurement at Black Rock and an audit associate at Ernst & Young, in addition to CFO roles at other various enterprises, according to his LinkedIn profile.
Along with Mack, the firm has two other managing directors, Philip Jones and David Roman, according to the firm's website.