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Dynamo Ventures closed its third fund at $54 million, the supply chain-focused VC firm announced Wednesday. 

Why it matters: The fund is more than triple the size of its 2016 inaugural fund, providing more capital to invest in early-stage startups.

What they're saying: "It will allow us to be increasingly thoughtful as we work with our portfolio companies, and think through things like product sales and the talent we need," Dynamo managing partner Santosh Sankar tells Axios.

"And also where you want to maybe lean in and where you want to lean out," he adds.

Catch up quick: Dynamo's investments include maritime insurer Ceto, autonomous delivery firm Gatik, fulfillment provider Stord, freight brokerage Sennder and freight forwarder Raft.

Context: The Fund III close comes as Kline Hill Partners acquired a significant stake in Dynamo's $18 million Fund I, launched in 2016.

The secondary deal provided 4x returns to LPs that invested in the fund. 

Kline Hill managing director Chris Bull says the firm is pleased to be "unlocking liquidity for [Dyamo's] dedicated pool of limited partners who have supported the firm's talented team for nearly a decade."

State of play: Traditional exits via IPOs and M&A remain sluggish in a challenging economy with tariffs muddying outlooks.

Secondaries once signaled distress, Dynamo acknowledges, but have increasingly become a core part of the venture liquidity playbook.

The Kline Hill Partners deal "reflects our responsibility to build for the long haul while returning cash to our earliest backers," Sankar says.

Zoom in: Dynamo promoted Madelyn O'Farrell and hired Cisco veteran and AI consultant Bola Adegbulu as principals of the Fund III.

Dynamo Ventures closes $54M fund, inks deal with Kline Hill Partners

The fund is more than triple the size of its inaugural fund, launched in 2016, providing more capital to invest in early-stage startups.

Illustration of a shipping container with briefcase elements

Dynamo Ventures closed its third fund at $54 million, the supply chain-focused VC firm announced Wednesday. Why it matters: The fund is more than triple the size of its 2016 inaugural fund, providing more capital to invest in early-stage startups.

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Dynamo Ventures closes $54M fund, inks deal with Kline Hill Partners

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