Pritzker Family Launches $190 Million Venture Fund to Back Startups

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Posted on July 25 , 2024 By TPO Admin

The venture arm of The Pritzker Organization, called 53 Stations, aims to use the continuing market slump to its advantage

By Marc Vartabedian

Nov. 22, 2023 6:00 am ET|WSJ PRO

The founders of 53 Stations, from left to right: Kevin King, managing partner; Jason Pritzker, managing partner; and Kelly Goldstein, partner and head of platform. PHOTO: MARY RAFFERTY

The Pritzker Organization, the family office for Thomas Pritzker who is the executive chairman of Hyatt Hotels, has started a venture division to invest in early-stage companies with a $190 million fund.

The venture arm, called 53 Stations, will target startups that could have strategic significance to more mature companies that TPO has majority control of, said Kevin King, a founder and managing partner of the new venture wing.

King said drawing on one limited partner will give 53 Stations the freedom to invest aggressively during the current down market in which venture firms have broadly slowed their investing pace and raised fewer new funds. The state of the market motivated 53 Stations to launch the fund but wasn’t the sole reason, King said.

“Had we been in a 2021-type environment, we might have been more apprehensive about launching the fund,” King said, referencing a year that saw a frenzy of deal-making activity and high valuations for startups. “The irony across markets is that the best time to deploy capital is often when it’s most difficult to raise it. TPO knows that you have to lean into those points when it feels less ideal and sometimes lean out when everything seems flushed.”

Chicago-based 53 Stations will aim to back startups that could have a symbiotic relationship with other companies that TPO has backed. For instance, King said that venture investments in the property-tech and construction-tech sectors, which 53 Stations is targeting, could eventually benefit concrete business Lithko Contracting, which TPO has backed, by integrating technology that Lithko might develop. Lithko could also help early-stage startups by acting as a client or resource, King added.

To be sure, King said that the market could continue to drop, making follow-on financing difficult for some companies. But he said that 53 Stations isn’t looking to back startups that will depend on large amounts of outside capital to operate.

“We’re looking for companies that can live within their own cash flow,” King said.

53 Stations will target a variety of startup sectors, mainly across North America. The firm will lead and co-invest in deals, writing checks of $1 million to $10 million from the seed to Series B stages. The firm was also founded by Jason Pritzker, a managing partner, and Kelly Goldstein, a partner and head of platform at 53 Stations.

Goldstein is a former principal at Harlem Capital. King was previously a partner at private investment firm General Catalyst. Pritzker joined TPO in 2013. Previously, he held roles at industrial holding company Marmon Group, Goldman Sachs and Hyatt Hotels. He is the son of Thomas Pritzker.

Founded in 2022, 53 Stations is TPO’s first venture fund, though the organization previously made individual investments into private companies. King said 53 Stations could seek to raise capital from third-party investors in the future.

The 53 Stations name is inspired by a parable of a young pilgrim seeking enlightenment who engages with 53 teachers or stations on his path. Each taught him something new and asked him to apply that wisdom on his journey. The firm says its name is a tribute to the journey of a founder.

TPO has made growth equity investments in companies including Pritzker Group, which is the family office for other Pritzker family members, has its own venture unit called Pritzker Group Venture Capital.

The Pritzker family made its fortune by expanding the Hyatt hotel chain, among other business endeavors. Family members have held influential roles in business and government. J.B. Pritzker, for instance, has been the governor of Illinois since 2019. Penny Pritzker served as secretary of commerce in the Obama administration from 2013 to 2017 and is currently the founder and chairman of Chicago-based private investment firm PSP Partners.

53 Stations has invested in seven companies across five industries, including global trade compliance platform Altana and aerospace propulsion technology company Whisper Aero.

Appeared in the November 24, 2023, print edition as ‘Pritzker Family Launches $190 Million Venture Fund’.