Dynamo Ventures Closes $54M Fund III, Unlocks Liquidity for Early LPs with Top-Decile Returns

CHATTANOOGA, Tenn., May 14, 2025 /PRNewswire/ -- Dynamo Ventures announced the close of its third fund at $54 million, more than tripling the size of its inaugural fund. The raise underscores Dynamo's focus on supporting early-stage founders who are reimagining the way the world's goods are made, moved, and monetized — across supply chains, logistics, and the foundational industries that power the global economy.

The milestone coincides with another significant development: a secondary transaction that provided early liquidity to LPs in Dynamo's $18 million Fund I (2016). Kline Hill Partners acquired a significant stake in the fund, creating returns over 4x and signaling strong conviction in Dynamo's portfolio. The transaction unlocked value for investors who backed the firm over eight years ago, with overall performance placing the fund in the top decile of its vintage. While secondaries once signaled distress, they've now become a core part of the venture liquidity playbook. According to PitchBook, 71% of exit dollars in 2024 came from secondaries.

"In a market where traditional exits via IPOs and M&A remain sluggish, we've embraced creative avenues to generate liquidity," said Santosh Sankar, General Partner at Dynamo Ventures. "This secondary sale not only validates the strength of our first fund, featuring four fund returners, including unicorns, but also reflects our responsibility to build for the long haul while returning cash to our earliest backers."

"We're pleased to provide an interim solution to Dynamo Ventures and its investors, unlocking liquidity for their dedicated pool of limited partners who have supported the firm's talented team for nearly a decade," said Chris Bull, Managing Director at Kline Hill Partners. "We believe Dynamo's portfolio, which includes some very promising assets, is well-positioned to realize its full potential."

Amid shifting global trade dynamics and growing pressure on legacy infrastructure, Dynamo's $54 million Fund III arrives at a pivotal moment and launches at a time when innovation in the physical economy has never been more urgent. Rather than chasing hype cycles, Dynamo focuses on sectors where digitization is overdue — manufacturing, logistics, transportation, and commerce infrastructure. The firm brings deep operational expertise and a global network to the table, backing companies like Stord (omnichannel fulfillment and eCommerce technology), Sennder (digital freight brokerage), Gatik (autonomous middle-mile delivery), and Raft (AI-powered freight forwarding operations) that are modernizing the movement of goods and redefining how industries operate at scale.

"We've always believed that the supply chain is more than trucks and warehouses—it's the industrial backbone of the global economy," said Jon Bradford, Managing Partner. "This fund gives us the firepower to keep backing the most ambitious and relentless founders reimagining how goods move."

Madelyn O'Farrell has been promoted to Principal in Fund III, recognizing her instrumental role in the firm's sourcing, selection, and stewardship efforts. The team also welcomes Bola Adegbulu, a seasoned founder and investor, as a Principal.  Bola will complement the team with his experience in incubating and investing at the inception stage in AI native businesses.

Dynamo Ventures

Dynamo Ventures is a pre-seed and seed-stage venture capital firm investing in startups building the future of the industrial economy Dynamo backs relentless founders reimagining how the world makes, moves, and monetizes the world's goods. Since launching in 2016, Dynamo has built a global network and portfolio of category-defining companies in both North America and around the world. The firm is headquartered in Chattanooga, Tennessee.

Press Contact:
Kathy Osborne
607-434-2065
[email protected]

SOURCE Dynamo Ventures