Fidelity Team Forms of Its Own Volition

Leaders of Fidelity Investments’ technology venture capital arm, Fidelity Ventures, announced last month that they have formed an independent investment company called Volition Capital.

Under an agreement with the mutual fund giant, Volition will continue to manage various assets that the principals developed while at Boston-based Fidelity, which includes 20 Fidelity Ventures portfolio companies in the United States and six European portfolio companies with what is now being called Fidelity Growth Partners Europe. Fidelity spokesman Michael Shamrell says that a separate U.S. unit, Cambridge, Mass.-based Fidelity Biosciences, will continue on its own and is not affected by the spinout.

Managing partners of Volition include Larry Cheng, Andy Flaster, Roger Hurwitz and Rob Ketterson. Other senior members of the firm include Geraldine Alias, Sean Cantwell, Don Haile, Anne Mitchell and Jill Roosevelt.

Fidelity Ventures, which had been solely funded by the parent company, will cease operations, at least for now, says a company spokesman, and the mutual fund giant will not have an ownership stake in Volition.Volition will focus on high-growth companies, which generally have between $5 million and $50 million in revenue and with little or no prior institutional investment. Volition Capital will invest in such sectors as the Internet, software, information services and tech-enabled services.Cheng says that the team was itching to run its own show and that an independent firm would make it easier to raise third-party capital. Cheng says that Volition has not yet begun raising its debut fund. He adds that Volition can access remaining dry powder in Fidelity Ventures IV to make new investments. That fund closed in 2005 with $250 million, but was later expanded to $400 million.

The firm’s recent investments include iPipeline, an Exton, Penn.-based developer of sales distribution software. In November, iPipeline raised about $12 million from Fidelity Ventures and NewSpring Capital, according to Thomson Reuters (publisher of VCJ). —Dan Primack and Ross Kerber of ReutersDEALWATCH: Five recent investments by Fidelity Ventures

EnterpriseDB Corp._Products, services based on PostgreSQL.

iPipeline Inc._Sales distribution software.

Prosper Marketplace Inc._Online marketplace for people-to-people lending.

Seatwave Ltd._Fan-to-fan ticket exchange.

Ventana Health Services Inc._Web application.

Note: Investments made between May and December 2009. Source: Thomson Reuters