NWA’s rising tech scene attracts interest from Tier 1 VC firm in Houston

If you are in tune with Northwest Arkansas’ startup and venture capital ecosystem, there is a new name to know.

In September, Serafina Lalany de la Fuente started consulting with the Northwest Arkansas Council on startup and VC development projects. An experienced startup executive with a lengthy and diverse resume, she relocated to Bentonville earlier this year from Houston. Most recently, she was the chief executive of Houston Exponential, an organization dedicated to advancing the innovation ecosystem of the country’s fifth-largest metro.

“I worked with founders to develop scalable programming, resources and tools that connected startups to the talent, customers and capital needed to scale,” she said. That work landed her on the Houston Business Journal’s Texas 100, a list of influential Texans likely to play crucial roles in the economy in 2022.

One of her first actions as a Northwest Arkansas mover and shaker was to invite Mercury Fund to the region. Mercury Fund is a Tier 1 VC Firm based in Houston with over $750 million in assets under management. Since 2013, the fund has contributed to creating more than $9 billion of enterprise value across its portfolio of over 50 companies. The firm invests in early-stage software as a service (SaaS) and data-focused startups.

Mercury Fund was founded in 2005 to invest in startups not based in major tech hubs on either coast. They do not have an Arkansas-based startup in their portfolio — not due to a lack of interest, but rather a lack of an “on-ramp” or entry point.

“There are underrepresented and untapped opportunities in the middle of the country for venture capital,” Heath Butler said. He’s a venture partner at Mercury Fund and was in Bentonville in October. “Not all venture capital needs to come from Silicon Valley and Boston and New York. We believe that middle America has all the talent and capability to build up their communities through innovation.”

On Oct. 26, Butler spent the day in Northwest Arkansas, meeting with the investor community and startups and hosting a “Shark Tank”-style pitch event. Mercury Fund also partnered with Arvest Bank to host a private dinner with about 20 founders at Blake St. in downtown Bentonville.

“There have been successful entrepreneurs here,” Butler said. “We’d love to be a part of it. All the ingredients to make a good community for innovation are here.”

Mercury Fund closed its fifth and largest fund in September, an oversubscribed round of $160 million. Butler said he would love to deploy some of those dollars in Northwest Arkansas.

“We can’t wait to find a deal here,” he said. “We would love to [meet] all the companies that we can that focus on B2B software and focus on our space. We are super excited and think this is one of the places where we will start spending a lot of time.”

De la Fuente said Mercury Fund plans additional regional visits in 2024.

FINDING BENTONVILLE
De la Fuente and her husband, Alex de la Fuente, moved to Bentonville this past January and were married here in April. She said they decided to relocate from south Texas to access the city’s mountain biking scene for his young company.

Alex de la Fuente is the co-founder and CEO of Hightag. He started the business with his brother Johnathan (CTO) two years ago. He moved to NWA, too.

The de la Fuente brothers grew up in south Texas immersed in action sports (motocross, mountain bikes, skateboards etc). That’s where the idea for Hightag came from. It is an automated media capture and delivery system that helps mountain bikers, skiers and other action sports athletes capture and share their moments.

“Picture a series of capture points along a ski slope or mountain bike trail, where riders carry one of our RFID tags,” Alex explained. “As they ride by our capture points, [cameras] automatically take photos and videos of them. When the riders are at the bottom of their run, they can pull out their phone and see all that media in their Hightag app.”

Hightag participated in a couple of business accelerators in the fall of 2022, including a showcase in Bentonville for outdoor recreation startups hosted by Plug and Play Tech Center.

You can learn more about the technology at hightag.com.