Fund Briefs, August 2011

Pelion Plans First Fund Since Merger

Pelion Venture Partners, the Salt Lake City, Utah-based firm that was created when UV Partners and Novell Venture Partners merged last year, plan to soon raise a fifth fund, according to sources.

As it heads out in the fundraising market, Pelion has a big recent win to highlight when courting LPs. Pelion has a 4% stake in Fusion-io shares, which were trading at more than $33 in mid-July and have appreciated substantially since the company went public in June.

Pelion owes its Fusion-io success to a Series B round investment it made in the Utah-based data storage company after providing it with a term loan following the company’s Series A round.

That isn’t to say Pelion’s aggregate team consists of one hit only.

Pelion’s other deals include investments in Red Hat Inc. and hearing aid developer Sonic Innovations. Existing investments include stakes in OpenLogic, the open source software and support provider; Gazillion Entertainment, the games developer; and mobile advertising company Mojiva.

Pelion did not provide comment for this story. Most of its management consists of UV Partners who defected from Novell in the years leading up to the firms’ combination. It remains to be seen how much of Pelion’s portfolio will be dedicated to health care and medical investments.

UV Partners raised $61 million for its most recent fund, according to a 2009 regulatory filing.

—Jonathan Marino

GSR Ventures Loads $350M China Fund

GSR Ventures, the early stage venture capital fund, has closed a new $350 million fund to invest in China. The firm’s fourth fund under management, the most recent vehicle, brings GSR’s assets under management to more than $1 billion.

LPs in GSR’s fund include Horsley Bridge Partners.

With offices in Beijing and Palo Alto, Calif., the firm primarily pursues early stage technology investments and has had two of its portfolio companies launch IPOs in 2011.

M/C Ventures to Seek $500M

M/C Venture Partners, an early stage investor in communications, IT and media, will soon be courting LPs for its seventh fund, set to mirror recent prior vintages of about $550 million, according to a source.

As of early July, M/C Ventures had not hired a placement agent for any of its prior six funds, the source said, but as the VC seeks to court international investors it is possible they will seek assistance in fundraising.

The VC is mostly through its sixth fund, a $550 million vehicle raised in 2006. The fund, which is about 75% deployed, will still make a handful of investments, the source said.

Recent exits include HyPerformix, which CA Technologies bought last year for an undisclosed price; and Fusepoint, which Savvis, a data center operator, bought for $124.5 million. M/C Ventures has also invested in Legendary Pictures, in 2005, the film production company produced such films as “The Hangover,” “The Dark Knight” and “300,” among others.

M/C Ventures continues to hold stakes in MetroPCS, Zayo Bandwidth and AccentHealth. It has not been a particularly busy year for M/C. As of early July, the lone investment it announced was its participation in a $25.6 million round in PlumChoice, a tech services firm.

M/C Venture Partners declined to comment for this story.

—Jonathan Marino

Truly Quick: True Ventures Nears $200M

True Ventures, an early stage firm based in San Francisco, is expected to soon announce it has closed a $200 million fund, according to sources.

The VC’s fundraising trajectory has been rapid. Recently, it revealed in a regulatory filing that it was raising $200 million. At the time, it had yet to reel in any capital.

It seems True Ventures managed to tap some true winners with its funds. Successful exits include two separate deals with AOL, in which True Ventures sold in December 2010 and blog content engine Sphere in 2008. Sphere was subsequently rebranded as Surphace.

Other exits include Socialcast’s May 2011 sale to VMware, Twitter’s recent acquisition of BackType, and the late 2010 sale of Milo to eBay for a reported $75 million transaction.

On the investment front, True Ventures has been active making seed stage, Series A and Series B deals in more than a dozen companies so far in 2011, including BackType, Milk, AdKeeper and Yobongo.

The firm’s prior funds include a $165 million first fund in 2006 and a $213 million second fund in 2008.

Existing LPs include Argonaut 20, Ohana Holdings, Park Street Capital Private Equity Fund VII, Paul Capital Top Tier Investments IV and Stichting Pensioenfonds ABP, according to Thomson Reuters research.

True Ventures did not immediately respond to a request seeking comment for this piece.

—Jonathan Marino

FoF Commitments Drop

Commitments to funds-of-funds slipped in the first half of the year, following a drop in venture capital fundraising, as the tight-money market continues.

A total of 26 funds-of-funds closed on new money in the first half of the year, raising a total of about $5.5 billion, according to a recent market research report by Preqin.

The number of funds-of-funds raising money in the first half fell 16% from 31 in the same period of 2010. Dollars raised fell 5% from about $5.8 billion in the first half of last year.

Preqin said the money raised in the second quarter was actually less than what investors committed to funds-of-funds in the first quarter. It added the largest fund to close during the first half was the $1 billion Portfolio Advisors Private Equity Fund VI.

Just over half of the funds-of-funds are focused primarily on the U.S. market. Slightly more than a third target Europe. The remainder looks to Asia and the rest of the world.

Preqin said 146 funds-of-funds remain in the market seeking about $42 billion. About a third have had an interim close. The largest pursuing cash is HarbourVest International VI Partnership, which targets about $3 billion.

—Mark Boslet