SAN FRANCISCO – With the majority of previous investors returning, 21st Century Internet Venture Partners expected an early September wrap on its second fund, 21st Century VP II, which is projected to exceed its $90 million target.
All existing pension funds and endowments except for Telecom Italia returned for the second vehicle, and they were joined by some newcomers, said J. Neil Weintraut, a general partner of the firm.
The firm backs early-stage companies that develop new ways to conduct business over the Internet, preferring enterprises based in Silicon Valley, but also investing in places such as Virginia and Georgia.
Fund II expects to back 16 companies with initial investments averaging about $3 million per deal but it will typically extend $7 million per company over several rounds of financing. The firm usually is the lead investor in its deals.
“We felt good about the progress and success [21st Century] made with the first fund,” said Gil Fuchsberg, corporate director of new media and technology at the holding company The Interpublic Group of Companies Inc., which invested in both funds. Fuchsberg praised 21st Century’s business connections and its understanding of the Internet economy in Silicon Valley and elsewhere.
The $55 million 21st Century VP I which closed in 1996 (VCJ, May 1997, page 31), invested in 10 companies. Portfolio companies include CareerBuilder Inc. and AdForce Inc., which both went public in May, and When.com, which was acquired by America Online Inc. in April.
Founded in 1996, 21st Century Internet, was a spin-off from Hummer Winblad Venture Partners, the San Francisco-based venture firm that invests in software and Internet companies. Hummer Winblad formed 21st Century Internet in the hope that it would become successful by investing in the new economy. The two venture firms now exist as separate entities but share office space.
Weintraut and Peter Zeibelman are 21st Century’s two general partners.