Xconomy has learned that three venture partners from Bellevue, WA-based Ignition Partners have formed a separate management company called Ignition Capital, and are working from new offices in downtown Seattle on private equity and late-stage investments. Jon Anderson, Rich Tong, and John Zagula are managing directors of Ignition Capital, whose fund is “focused on profitable mid to late stage companies,” according to the new firm’s website.
The move appears to be part of a reorganization at Ignition, according to a source familiar with the situation. The nine-year-old company, which collectively has more than $2 billion under management, has split into Ignition Venture Partners (Bellevue), Ignition Capital (Seattle), and Qiming Venture Partners (Shanghai). Qiming was formed in 2006 and focuses on companies in China. Ignition Capital’s fund itself is not new either: Ignition Partners announced the formation of a $275 million “growth capital” fund in October 2007. But the separate downtown office and management firm is a more recent development. Xconomy has not yet been able to speak with Ignition about its overall strategy, but multiple e-mail messages have been sent to partners at Ignition Capital and Ignition Venture.
In recent months, Ignition Partners has been rocked by developments at a couple of its portfolio companies— most notably Seattle-based Entellium’s fraud court case and bankruptcy, and the closing of Bellevue-based Sotto Wireless. But in the past month, the venture firm has also announced investments in software startups Skytap (Seattle), Enclarity (Aliso Viejo, CA), and Zenprise (Fremont, CA).
Anderson, Tong, and Zagula are former senior Microsoft employees and Ignition co-founders who have been with the firm since its inception. They are best known for making early-stage investments, but now seem to be focusing on growth-stage tech deals as well as non-tech buyouts. They are joined at Ignition Capital by managing director Robert Headley, a former Starbucks vice president who is also an Ignition Venture partner and acting managing director of Qiming Venture Partners. The Ignition Capital website lists six other employees in Seattle, including operating partners Shawn Bohnert, Rennie Coit, and Ty Graham, bringing its total headcount to at least 10.
The site also lists seven portfolio companies: SeaMobile (wireless for ships, based in Miramar, FL); wireless and satellite communications firms MTN (South Africa), WMS (Florida), and Geolink (Australia); clinic developer Liberty Dialysis (Mercer Island, WA); and Chinese firms Oriental Cambridge Education Group (Beijing) and eHi Car Rental (Shanghai). Ignition Partners originally invested in SeaMobile in 2005 and Liberty Dialysis in 2007, while the two Chinese companies are also in Qiming’s portfolio.
In terms of its investment philosophy, Ignition Capital’s website says, “These are very challenging times for any investor and any business, where sources of capital are limited, growth is uncertain and where the ruling dynamics of many industries are undergoing massive change. At Ignition Capital we believe that with an unwavering focus on business fundamentals, the few companies forged and tempered under these most demanding circumstances can take advantage of these shifts and earn both exceptional ongoing returns and the dominant positions in their markets.”
