AlleyCorp raises $335 million for second outside-backed fund
Kevin Ryan’s firm told Fortune it will keep writing early checks in healthcare, deep tech and general technology startups.
By Daniel Okafor · Business Editor
3 min read
AlleyCorp has raised a $335 million second fund, giving Kevin Ryan’s New York venture firm more capital for early-stage startup investments. The firm told Fortune it plans to keep focusing on young companies in healthcare, deep tech and general technology.
The fund follows AlleyCorp’s first vehicle with outside investors, a $250 million fund raised in 2024, according to Fortune. Ryan founded AlleyCorp in 2007 as a family office, and the firm has since backed and built companies through an incubation model.
Ryan is known for cofounding or helping start companies including MongoDB, Business Insider, Gilt Groupe and Zola, Fortune reported. A person familiar with AlleyCorp’s finances told Fortune that the firm’s earlier investments have produced a 60% all-time internal rate of return.
Ryan told Fortune that AlleyCorp’s approach has not shifted much even as venture capital has been reshaped by large artificial intelligence financings. He said the firm recently invested in a company valued at $25 million with about $500,000 in revenue, and that AlleyCorp’s job is to help build such businesses.
“The fundamentals haven’t changed much,” Ryan told Fortune. “The things we invest in change over time.”
Early checks remain the focus
Ryan told Fortune he remains focused on first checks below $10 million. He said he defines venture capital by the stage of a company and the size of the investment, rather than by the size of a fund.
AlleyCorp currently has eight unicorns in its portfolio, according to Fortune. The group includes Rogo, ShopMy, Valar Atomics and Thyme Care.
Ryan said AlleyCorp could raise a larger fund in the future without changing its strategy. He told Fortune a future vehicle could reach $500 million or $600 million, and that additional capital could allow the firm to add more people in areas such as biotech or expand geographically.
Ryan drew a distinction between AlleyCorp’s early-stage work and the tens of billions of dollars flowing into companies such as Anthropic and OpenAI. He told Fortune he does not view that category as traditional venture capital, describing those companies as larger than many public companies.
He also said headline venture totals may be distorted by very large financings for a small number of companies, including SpaceX, Anthropic and OpenAI. If those deals are excluded, Ryan told Fortune, venture investment could look lower.
Bets before they are obvious
Ryan pointed to psychedelics as an example of the kind of early bet he wants AlleyCorp to make, Fortune reported. He was once doubtful that psychedelics could become treatments for depression or PTSD, but changed his view after reading Michael Pollan’s “How to Change Your Mind” in 2018 and reviewing emerging data.
Ryan later became a major supporter of the Yale Center for Psychedelic Research and cofounded Transcend Therapeutics, a psychoactive drug company that sold in June for $1.2 billion, according to Fortune.
Ryan told Fortune he tries to think about where the world may be five to ten years ahead and invest before a market becomes obvious. He also said technology timelines remain hard to forecast, citing predictions from 2017 that driverless cars would be widespread by 2026, while AI has moved faster than he has seen before.
This story draws on original reporting from Fortune.