DFJ beats target for growth fund

After more than 20 months of fund-raising, DFJ Growth, the expansion stage affiliate of Draper Fisher Jurvetson, was preparing to close on $300 million at the end of August, VCJ has learned.

As of early August, the firm had already beat its initial target of $250 million when it raised $268 million from limited partners and $3 million from its general partners, according to sources.

The growth effort is led by DFJ co-founder John Fisher, onetime America Online CEO Barry Schuler and venture capitalist Mark Bailey. They are supported by Associate Daniel Groen, who was previously with TA Associates.

In March, reception to the growth vehicle looked cool as the team had secured commitments of just $155 million, according to a regulatory filing. At the time, one potential investor in the fund had expressed concern that the value of the fund was neither clearly explained nor adequately differentiated from other firms and funds in the space. Also, it’s not unusual for DFJ-related funds to ask for a high carry of 25% and fees of 2.5%, which may have slowed fund-raising.

The firm’s recent fund-raising surge has come as limited partners are upping their commitments to growth stage investors. Five of the top 10 funds raised during the second quarter were growth funds, according to data from Thomson Financial (publisher of VCJ).

DFJ Growth has invested in at least three companies to date: It participated in a $51 million round for Visto, a mobile email technology startup in Redwood City, Calif., a $15 million Series C for commercial laser company Raydiance, and a $23.5 million round for UUSee, a Chinese operator of a video distribution website. —Alexander Haislip