Fund briefs May 1, 2015

NORTH AMERICA

HarbourVest Canada Growth Fund lands C$197 mln

HarbourVest Canada Growth Fund, a venture fund of funds managed by Boston-based asset manager HarbourVest Partners, has secured C$197.2 million in an initial close.

The fund, the fourth to be formed in partnership with Canada’s Venture Capital Action Plan (VCAP), raised about two-thirds of its committed capital from a mix of banks, corporations and institutional investors.

LPs for the initial close include BDC Capital, BMO Financial Group, Canada Pension Plan Investment Board, CIBC, Knight Therapeutics, Laborers’ Pension Fund of Western Canada, Royal Bank of Canada, Scotiabank and TD Bank Group. HarbourVest also committed through its global private equity fund of funds.

About one-third of the fund’s commitments, or C$65.7 million in total, was provided by VCAP, a program established two years ago by the Canadian government to shore up the supply of venture capital supply in the country.

While a target was not disclosed, sources familiar with the fundraising previously told peHUB Canada–a VCJ affiliate publication–that HarbourVest is shooting for about C$300 million.

The HarbourVest fund will be managed from the firm’s new office in Toronto. HarbourVest recently announced the opening of the office, marking its first in Canada. It will be led by Senia Rapisarda, who was concurrently hired as a principal.

Rapisarda, a former BDC Capital vice president, said she wants to focus on introducing more Canadian corporate and institutional investors to the venture market.

“I understand that some institutional investors were burned in the past, but it’s important to recognize that the asset class has matured,” she said. “These days, I believe it’s hazardous for your business to be out of venture capital.” –Kirk Falconer

Anthos, with Goldman pedigree, raises $300 mln

One of the names creating buzz among limited partners is Anthos Capital, a California firm founded by former Goldman Sachs execs.

Anthos Managing Partner Bryan Kelly said the firm closed Fund III on $300 million in April, meeting its target. Fundraising took four months and the firm did not use a placement agent, Kelly said.

A limited partner source who has heard the fundraising pitch said Anthos has expanded the scope of its fundraising for this vehicle, reaching out to a broader base of potential investors than it did with prior funds.

The firm, which makes venture capital and growth investments, focuses on consumer-oriented companies. Anthos participated in a $4 million Series A round in food delivery service Munchery in 2013, a $5.3 million Series A round for mobile gaming company Machine Zone Inc in 2011, and an $11 million Series A round for men’s clothing service Trunk Club in 2011.

Anthos targeted $70 million for its second fund in 2013, according to a regulatory filing, and apparently exceeded that amount. Its latest filing shows Fund II with gross asset value of about $82.7 million.

Anthos, with offices in Menlo Park, Calif., and Santa Monica, Calif., started life with backing from Goldman Sachs executives. The firm was founded by Kelly, Gavyn Davies, John Hagerty, Thomas Healey, Paul Farr and Eff Martin. Kelly and Farr are listed as managing partners on the firm’s website. –Chris Witkowsky

.406 Ventures targets third fund at $200 mln

Boston-based .406 Ventures, an investor in Veracode and Ambient Devices, is seeking to raise $200 million for its third fund, according to a regulatory filing in April.

The firm raised $175 million for its second fund in 2010 and $167 million for its inaugural effort in 2006. The firm, named after Ted Williams’ batting average in 1941, was co-founded by Managing Directors Maria Cirino, Larry Begley and Liam Donohue.

The firm recently promoted Graham Brooks to partner.

Exits include Mashery, which Intel bought in April 2013. –Alastair Goldfisher

Georgian Partners wraps up oversubscribed applied analytics fund

Growth equity firm Georgian Partners, a backer of ecommerce platform Shopify, has surpassed its target in a final close of its second applied analytics fund.

The Toronto-based firm announced that Georgian Partners Growth Fund II has finished at an oversubscribed C$200 million in committed capital. That’s roughly 67 percent more than the C$120 million target.

LPs that signed on to Fund II represent a mix of North American corporate strategic investors, family offices, funds of funds and pension funds, said Justin LaFayette, co-founder and managing partner of Georgian Partners (pictured below).

The fund’s lead LP is Northleaf Capital Partners. It was joined by BMO Financial Group, Cisco Systems, Fondaction CSN and Kensington Venture Fund, among others.

Fund II also attracted a major U.S. institutional investor that prefers to remain undisclosed, LaFayette said.

Georgian Partners invests in applied analytics—an emerging technology that encompasses the convergence of business process knowledge, big data and broad information rights.

Since 2008, the firm has invested in high-growth companies focused on leveraging more commercial value from their data assets. High profile examples from Georgian Partners’ portfolio include Shopify, whose platform lets retailers set up online companion stores, and cloud-based accounting solution provider FreshBooks.

LaFayette said the fund is likely to do five or six more deals over the next 12 months. He’s looking at North American sectors such as cybersecurity, educational technology, healthcare IT, and marketing and sales automation. –Kirk Falconer

Lux Capital raises oversubscribed fourth fund

Lux Capital said it has closed an oversubscribed $350 million fourth fund for early-stage investing. The fund had an initial target of $245 million and brings the total capital under management at the firm to $700 million, according to a press release.

The fund is a step up from Lux’s $245 million third fund, according to Thomson Reuters.

Lux invests in early seed deals that are little more than ideas to more fully developed companies raising Series B capital. It expects to invest up to $20 million in a startup. Current investments include 3D printing market place Shapeways, nuclear waste cleanup company Kurion and skunkworks lab CyPhy Works.

New areas of interest include augmented reality for the blind, neuro stimulation, age extending blood transplants, synthetic biology for industrial production, and Internet of things security for industrial and factory automation. –Mark Boslet

Social+Capital to raise opportunity fund

Social+Capital Partnership is raising a $150 million opportunity fund, according to a filing with the SEC. Social Capital Partnership Opportunities Fund has yet to have a first close, the filing states.

The Palo Alto, Calif.-based firm raised its $275 million second Social Capital Partnership II fund in 2013 and is presently raising a $450 million third fund. –Mark Boslet

Freestyle raises third fund, adds partner

Freestyle Capital has raised a third fund and added new partner Jenny Lefcourt to its ranks, according to a blog post. The size of the new fund is $60 million, according to a news report on TechCrunch.

The firm’s previous fund was $40 million, according to a regulatory filing .

Lefcourt co-founded the WeddingChannel.com and Bella Pictures. The firm was founded by Josh Felser and Dave Samuel. –Mark Boslet

From the filings: Correlation, Illuminate and more

• Correlation Ventures has begun raising a second fund of $170 million, according to a regulatory filing. The four partners in the fund are David Coats, Trevor Kienzle, Grace Chui-Miller and Anu Pathria, the document states. The fund has not yet reported a first close. The firm’s first fund in 2011 was $135.98 million in size, according to Thomson Reuters.
• Illuminate Ventures is seeking to raise $30 million for its second fund, according to a regulatory filing. Oakland-based Illuminate is an early-stage venture firm that targets startups with a focus on enterprise cloud and mobile computing.
• Ignition Partners has set out to raise a $200 million sixth fund. Ignition Venture Partners VI will be managed by Managing Partners Frank Artale, John Connors and Nick Sturiale and administrative Partner Robert Headley. The firm’s previous 2013 fund raised $150 million, according to Thomson Reuters.
• Ribbit Capital is targeting $220 million for its third, according to a regulatory filing. Ribbit Capital III has yet to have a first close, according to the document. Ribbit, which focuses on financial services investments, raised a previous $124.73 million fund in 2014, according to Thomson Reuters.
• Sozo Ventures has raised $110 million toward a $300 million fund. The fund, called Sozo Ventures – TrueBridge Fund, held a first close in November 2012 and so far 10 LPs have participated, according to the regulatory document.
• Pelion Venture Partners has targeted $200 million for its sixth fund, according to a regulatory filing. The Salt Lake City-based early-stage venture firm raised $194 million for its previous fund.
• Rise Capital Management has attracted $59.6 million toward its maiden fund, SEC filings show. Rise Capital I has a target of $146.6 million.
• RiverVest Venture Partners has raised $75.8 million toward a $150 million third fund, according to a regulatory filing. The filing says 41 LPs are involved and that the firm hopes to raise another $74.2 million.
• SWaN & Legend Venture Partners is seeking to raise $150 million for its third fund. Based in Leesburg, Virginia, SWaN & Legend backs companies that build consumer brands “as well as the B2B companies that support them.”

EUROPE

Index wraps up third growth fund

Leading European VC Index Ventures has disclosed in a U.S. regulatory filing that it has secured €650 million ($706 million) for its third growth fund.

The Geneva-founded firm’s largest-ever fundraising beats the €500 million it raised in 2011 for its second growth equity fund, which invested an average of €25 million per life science or technology business.

The firm previously raised about $692 million for its second growth fund, which closed in 2011, according to data from Thomson Reuters. Fund I raised about $585 million in 2008.

The six listed partners in Index Ventures Growth III are Philip Balderson, Bernard Dalle, Nigel Greenwood, David Hall, Ian Henderson and Sinead Meehan. –Alex Derber and Alastair Goldfisher

Partech plans startup blitz

Paris-based Partech Ventures has mobilized its existing LP base to back what it describes as the largest privately managed seed fund in Europe.

The technology investor has raised €60 million ($66 million) for Partech Entrepreneur II from such companies as car maker Renault, supermarket chain Carrefour and business services provider Edenred, all of which participated in its last venture fundraising, Partech International VI.

The fund is targeting three deals per month, with at least one-third of its deals in France and the rest in the rest of Europe and the United States. The fund will invest from €300,000 to €1 million per initial investment in up to 70 companies.

This will entrench a three-pronged strategy that has seen the firm raise separate funds for seed, venture and growth equity deals.

In February, Partech held an initial close at €200 million ($220 million) for its first growth equity fund, while in 2013 it raised €30 million for its first seed fund. –Alex Derber

Pathfinder for Polish life sciences

The first VC fund to benefit from Poland’s €10 billion ($11 billion) innovation program has announced an initial close of $42 million.

The Joint Polish Investment Fund Management (JPIF) won commitments from The National Centre for Research and Development and private institutional investors for its Poland-focused life sciences fund.

The firm will invest in seed and growth-stage businesses with up to $4 million per company.

“Life sciences VC is in its infancy in Poland. Many people don’t know how VC deals are structured and teams aren’t used to executing on company development at the required speed,” Kreske Nickelsen, a general partner with the firm, told VCJ.

Nickelsen expects other VCs to emerge over the next five years, during which Poland is planning to spend €8.6 billion ($9 billion) to support early-stage research and innovation.

JPIF is targeting a final close of up to $70 million within the next year. –Alex Derber

Web-focused ISAI nets $60 million

Internet entrepreneurs have reaffirmed their support for Paris-based ISAI, which has raised €55 million ($60 million) for its second early-stage fund.

The first close included commitments from about 60 Internet entrepreneurs, as well as institutional investors bpifrance and Credit Mutuel Arkea, which will each have 13 percent to 15 percent of the new fund.

ISAI has set a hard cap of €70 million ($77 million) for ISAI II, twice the size of its 2010-vintage debut fund.

The fund will invest from €750,000 to €2 million at a time and in about four deals annually.

A portion has also been reserved to co-invest with business angels, some of whom are ISAI LPs, in five or size seed-stage deals per year. –Alex Derber

ASIA

Accel India announces $305 million fund

The Indian arm of international VC Accel Partners has announced a new $305 million fund to invest in early-stage tech startups in India.

Accel India IV will focus on early-stage companies in the consumer, enterprise software, mobile and healthcare sectors. Like its predecessors, a portion of Fund IV will be used for growth equity funding.

Palo Alto, Calif.-based Accel Partners has operated an Indian offshoot from Bangalore since 2005. –Alex Derber

Taipei accelerator gains investment clout

Taiwan has enjoyed a string of new venture fund launches this year, but none from its small indigenous venture community.

That has changed with the establishment of a TD$1.5 billion ($48 million) fund by Taipei-based accelerator Appworks.

Its principal LP is Taiwan’s National Development Fund, but commitments have also been secured from Cathay Life Insurance, CDIB Partners Investment, CID Warwick Group, Chinatrust Venture Capital, Far EasTone Telecommunications, Fubon Life Insurance and United Daily News.

Appworks Fund II will target Taiwanese startups active in big data, mobility and the Internet of Things, and will participate in seed-stage deals up to Series B rounds.

Many of the deals will be sourced from the Appworks’ own accelerator program, which it describes as “the largest in Asia.”

The accelerator’s first fund topped out at $11 million in 2012. –Alex Derber

AUSTRALIA

Chile magnate spices up Australian startup scene

Alberto Chang-Rajii, one of Google’s earliest investors and founder of Santiago, Chile-based investment firm Grupo Arcano, has set aside $100 million to bolster Australian tech startups over the next two years.

Chang-Rajii, whose $3.7 billion stake in Google snowballed from a $10,000 investment he made while a student at Stanford University in 1996, intends to spend $100 million over the next two years in Australia, targeting such areas as nanotechnology, smart medicines, clean energy and agriculture.

His first deal is in a company called Future Solar Technologies, created by a team from the University of New South Wales and which is developing “paint-on” solar cell technology. The startup has already received A$1.5 million ($1.1 million) from Grupo Arcano.

“I’m not investing in a tiny microscopic cell in a lab. I’m investing in future homes that will not require energy because there are solar tiles,” Chang-Rajii told the Australian Financial Review.

Chang-Rajii still holds a 1 percent stake in Google through Grupo Arcano, which has also invested in other U.S.-based tech companies, such as Snapchat, Square and Uber. –Alex Derber

MIDEAST

Banks launch Leap in Lebanon

Beirut-based Leap Ventures is up and running following a $71 million first close for its debut fund.

Like other new Lebanese firms, Leap owes its existence to a Central Bank of Lebanon initiative to guarantee other banks’ investments in Lebanese startups and VC firms.

As a result 13 banks have backed Leap, which hopes to reach an $80 million second close in the summer.

The firm is also raising a second fund to target the wider Middle East region.

The funds will focus on IT in sectors from healthcare to media, while Lebanon-oriented Leap I will mainly back Series B deals, investing from $5 million to $10 million per company.

“Going forward, we anticipate an even stronger pipeline as several, newer, earlier-stage funds enable the growth and development of current entrepreneurs,” a firm spokesperson told VCJ.

One of the those funds could be Middle East Venture Partners, which tapped Lebanese banks for a $55 million first close late last year. –Alex Derber