NY Boutique Preps Fund II

Stripes Group is preparing to start raising its second fund earmarked for lower mid-market investments, a source close the effort told Buyouts.

The firm is currently in pre-marketing mode and is hoping to begin fundraising officially by 2012, or as early as the second quarter. It does not yet have a placement agent, but its executives are debating whether to use one.

Stripes Group typically invests $20 million to $30 million of equity in its deals, targeting companies involved in the Internet, digital media, e-commerce, enterprise software, information technology and other software-related assets. The firm’s portfolio includes Epic Advertising of New York, a performance-based online advertising network for advertisers and publishers; Folica, an online hub for hair care products, also based in New York; and MyWebGrocer, a Colchester, Vt.-based provider of online commerce, communications and digital media services to grocery store chains.

Ken Fox, an entrepreneur who co-founded publicly traded investment firm Internet Capital Group in 1995, launched Stripes Group in 2003. The firm operated out of a pledge fund before it started raising an institutional fund in 2008, an effort the financial crisis subsequently delayed.

In March of last year, the firm closed its first fund with $180 million in commitments. It did not employ a placement agent for that effort.

The firm has not yet decided on a target for Fund II but will likely seek more than it did with fund I, the source said.