ANDOVER, Mass./MENLO PARK, Calif. – @Ventures, the venture capital arm of CMGI Inc., recently launched the $1 billion @Ventures Technology Fund to back early-stage Internet enabling technologies and infrastructure companies, said Lior Yahalomi, managing partner of the fund.
While it is still unclear how many companies the fund will back, average initial investments will range from $5 million to $10 million, and the fund will make follow-on investments up to the pre-initial public offering stage, Yahalomi said. The vehicle, which will have a support staff to assist portfolio companies with human resources, business development, marketing, financial and technological needs, will focus on enterprises in the United States but also will consider investments abroad, he added.
At press time, @Ventures Technology had invested in one company, Arlington, Va.-based DiamondBack Vision Inc., a developer of multimedia products and services for commercial Internet markets.
Concurrently, @Ventures is announcing the formation of CMGI @Ventures B2B Fund and @Ventures IV, which together are expected to be capitalized around $2 billion and will be entirely funded by CMGI, (VCJ, January, page 20). The funds focus on different types of technology investments and will be supported by deal flow through the company that reaches about 2,000 business plans a month.
Like preceding @Venture funds, CMGI is the latest vehicle’s sole limited partner and will continue to provide capital as needed. This arrangement allows @Venture’s investment team to focus on investing, and it also allows CMGI to benefit from all the returns, Yahalomi said. CMGI is composed of a network of Internet-related business-to-business and business-to-consumer e-commerce companies. Together with its incubator arm, @Ventures, CMGI has funded more than 50 companies.
The company’s prior fund, the $280 million @Ventures III, was the only CMGI fund to accept capital from outside investors, including Microsoft Corp., Intel Corp. and Vulcan Ventures.
Yahalomi and General Partner William Hawkins will manage the technology fund’s investments, along with David Wetherell, president, chief executive officer and chairman at CMGI, and Peter Mills, a managing partner of other @Venture funds. Three other general partners, whose names were not yet revealed at press time, also will join the team. An additional five-person staff will be hired to identify, analyze and evaluate deals for the new vehicle.