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Commerce-focused VC firm raising first fund

August 1, 2012: 11:38 AM ET

New micro-VC firm to focus on retail technologies.

FORTUNE -- Venture capitalist Dan Rosen has left Highland Capital Partners after a six years, in order to form a firm focused on the intersection of mobile, payments and retail. The new effort will be called Commerce Ventures, and hopes to raise $20 million for its debut fund (with a hard cap of $30 million).

"I believe that I understand this ecosystem," Rosen says, pointing out that his first four years in the working world were spent clerking at drug stores. "My focus at Highland has been on mobile from infrastructure up to mobile advertising, and from there we've made some investments around the intersection of mobile with payments that also has introduced me to things like gift cards."

Rosen hopes to raise much of the fund from companies and individuals with strategic ties to the retail space. It will be interesting to see if one of those investors is Straples (SPLS) founder Tom Stemberg, who runs a retail-focused fund for Highland. During a meeting last week to discuss changes to his own strategy, Stemberg said that he avoids retail-focused technology companies because each has several rivals, and the market leader usually is the one willing to sell its wares the cheapest to large retailers.

Rosen expressed great respect for Stemberg as a "retail genius," but said that he respectfully disagrees with his investment thesis. "Most retail marketing is still offline, and that's changing fast," Rosen said. "Inside the stores, some surveys suggest that 75% of retailers plan to change out their point-of-sale systems in the next five years, and many retailers are investing in mobile apps for better in-store engagement. There is a lot of opportunity here."

Prior to joining Highland in 2006, Rosen worked at RSA Security (corp dev), HarbourVest Partners (associate) and American Management Systems (biz analyst). He is expected to continue representing Highland on the boards of several portfolio companies. Rosen's Highland deals have included Optasite (sold to SBA Communications), Quattro Wireless (sold to Apple), Picochip, PerkStreet Financial, Triad Communications and Zoove.

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Dan Primack
Dan Primack
Senior Editor, Fortune

Dan Primack joined Fortune.com in September 2010 to cover deals and dealmakers, from Wall Street to Sand Hill Road. Previously, Dan was an editor-at-large with Thomson Reuters, where he launched both peHUB.com and the peHUB Wire email service. In a past journalistic life, Dan ran a community paper in Roxbury, Massachusetts. He currently lives just outside of Boston.

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