Fund briefs recap

VC funds proliferate

The global venture capital industry is finding its feet again, with more funds on the road in 2014 than in any year since the financial crisis.

Almost 600 managers are currently marketing new funds, according to researcher Preqin.

However, the lean period has clearly sapped confidence, as the current glut of fundraising is targeting far less money than in the past.

In 2007, for instance, 444 funds were after $85 billion, compared to the $59 billion sought by VCs in the current climate.

Of course, managers may merely be setting themselves more realistic goals, and Preqin reports that more funds are now meeting their launch targets than at any time since 2007. –Alex Derber

Tiger Global raises $2.5 bln for VC deals

Tiger Global Management plans to extend its reach into venture capital as it unveiled a $2.5 billion fund in an regulatory filing in early December.

The fund, Tiger Global Private Investment Partners IX, came in larger than expected following reports earlier this year that estimated the firm would raise a $1.5 billion investment vehicle. The latest fund follows by only seven months the firm’s $1.5 billion eighth venture fund.

Tiger Global previously collected $1.49 billion in a 2012 fund and $1.25 billion fund in 2010 fund, according to data from Thomson Reuters.

A Tiger spokesperson declined comment on the new fund’s focus.

Tiger has been an active investor in the United States and abroad with such investments as One Kings LaneFlipkart Online ServicesEventbriteAutomatticPure StorageSquareQuora and Zynga–Mark Boslet

North American-focused Golden closes second fund

Canadian venture firm Golden Venture Partners has closed its second fund, Golden Venture Partners II, at $40 million.

Capital commitments to the oversubscribed Fund II were led by Northleaf Venture Catalyst Fund, which contributed $15 million of the total, as well as participation from BDC Capital and other investors.

Toronto-based Golden Venture Partners said a new fund that is larger than the $17 million Fund I will allow it to lead or join seed deals of up to $750,000; undertake larger and later-stage investments of up to $1 million; maintain reserves for future portfolio activity; and diversify investing in around 25 mobile tech companies. –Kirk Falconer

Madrona unveils in-house incubator

Venture capitalists say they like to become involved with companies early. How about before they start!

That is the motivation behind Madrona Venture Labs, an incubator for idea-stage companies sponsored and funded by Madrona Venture Group.

Labs, which the firm unveiled in December, is designed to take a business idea from a Madrona partner, a labs employee, or perhaps from the community-at-large, and turn it into a company with revenue, traction and the likelihood of raising money.

The first company to emerge is Spare5, a mobile app that raised $3.25 million of seed funding from New Enterprise Associates, Foundry Group, several angels and Madrona itself.

The labs began operating in June and has seven employees who nurture an idea to the point where it has a working product and customers. Then it helps recruit a management team, technical staff and investors.

“We’re really trying to swing for the fences with these companies,” said Madrona Managing Director Greg Gottesman. “A lot of VCs say they are going early. This is definitely investing early.”

Gottesman said Madrona has incubated a handful of companies in-house over the past decade, but never in as systematic a way. With the labs, ad hoc is giving way to organized process. The goal now is to have two to three companies come out of the labs each year able to raise seed capital. Other ideas will be tried and abandoned if they don’t show traction.

The effort is being led by Gottesman and repeat entrepreneur Joe Heitzeberg. –Mark Boslet

Crosslink raises $137 mln

Crosslink Capital has raised $137 million for a seventh venture fund, according to a pair of regulatory filings.

The firm closed on $90.1 million for Crosslink Ventures VII with 38 participating investors, according to the documents. The fund’s first close was in November 2013.

The San Francisco firm also raised $46.55 million from 15 investors for Crosslink Ventures VII-B.

Crosslink in a separate document said it was raising Crosslink Bayview VII, but didn’t specify a target for the fund. The firm’s sixth venture fund collected $265 million in 2009 and 2010, according to Thomson Reuters. Crosslink Ventures VI raised $220 million in 2009 and Crosslink Ventures VI-B raised $45 million in 2010, Thomson Reuters reported.

The firm did not respond to an e-mail seeking comment. –Mark Boslet

Twitter co-founder Williams launches Obvious

Obvious Ventures, a new San Francisco-based venture firm, has officially launched, according to a blog post by co-founder Ev Williams.

The firm is currently raising capital for its inaugural fund that will focus on what it calls “world positive” investing.

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Leonardo DiCaprio

Source: REUTERS/Suzanne Plunkett

Leonardo DiCaprio, seen here arriving at the British Academy of Film and Arts awards ceremony in London in February 2014, is listed as an adviser to newly launched venture fund Obvious Ventures.

In addition to Williams, who is a co-founder of Twitter, Obvious Ventures’ other co-founders are James Joaquin and Vishal Vasishth. Among Obvious Ventures’ advisors are Twitter co-founder Biz Stone and actor Leonardo DiCaprio.

Although the firm has officially launched, Obvious has already invested. Its first announced deal was to lead the $5 million Series A round for Breezeworks, a San Francisco-based company that provides an app with scheduling, accounting and other features for service professionals, such as plumbers, mechanics and maintenance workers.

DAG to raise $300 mln

DAG Ventures is raising a $300 million sixth fund, DAG Ventures VI, according to a regulatory filing. The fund appears less ambitious than the firm’s previous, which in 2011 targeted $500 million, according to a filing at the time.

The filing for Fund VI lists three managing directors: Greg Williams, Young Chung and Nicholas Pianim. Managing Directors Tom Goodrich and John Cadeddu are not included.

Portfolio companies include Bloom Energy, Cloudera and Zuora. –Mark Boslet

Artis Ventures raises $51.7 mln for second fund

Artis Ventures said it has raised $51.7 million for a second fund, Artis Ventures II, according to a regulatory filing. The fund has a $3.3 million stake yet to sell and a target of $55 million.

Artis, which was founded in 2001 and led the Series B round in YouTube in 2006, closed its first institutional fund in 2012 and currently has investments in Bracket Computing, Practice Fusion, Nimble Storage and Quid, among others.

The new fund’s first sale took place in November 2013 and the filing says 65 investors have taken positions. The only GP listed on the filing is Artis co-founder Stuart Peterson. However, other partners include co-founder Mike Harden and Chris Haroun.

Qualcomm invests in China

Telecom giant Qualcomm has committed to investing in China Walden Venture Investments, a China-focused semiconductor fund.

In addition, the company said it is backing four Chinese startups: 7Invensun, an eye-tracking solution provider; Chukong Technologies, a mobile entertainment platform provider; and Unisound, a voice recognition and processing technology provider.

Overall, San Diego-based said it is investing an aggregate of $40 million in the companies and fund to be funded through the company’s $150 million strategic China venture fund that was announced earlier this year.

Ottawa unveils Immigrant Investor pilot program

The Canadian government has announced its new Immigrant Investor Venture Capital (IIVC) pilot program, which is intended to attract immigrants with business experience to Canada.

The program, which will begin accepting applications in late January 2015, will target bringing in about 50 immigrant investors who each have a net worth of $10 million and can make a commitment of $2 million for a period of 15 years.

Commitments will capitalize an IIVC fund vehicle, which will invest in Canadian innovative startups with high growth potential.

The IIVC fund is expected to raise at least $100 million. –Kirk Falconer

Venturing into Bangladesh

The creation within seven years of Bangladesh’s first billion-dollar enterprise is the ambitious goal of San Jose, Calif.-based Fenox VC, which has launched a $200 million fund aimed at technology, Internet and media startups in the country.

Fenox has already committed $50 million to the fund, and is targeting expat Bangladeshis as well as corporations and multinationals in the South Asian country to raise the balance within the next six months.

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Shameem Ahsan, general partner, Fenox VC

Source: Photo courtesy of Fenox VC

Other VCs, local to region as well as the United States, have also contacted the firm to discuss cooperative investments in the country.

Fenox will mainly invest in Series A deals, channeling from $500,000 to $5 million into each.

Its first investment was for an undisclosed sum in Priyo.com, a news and lifestyle website similar to Yahoo.

Shameem Ahsan, who will manage the fund as general partner from Fenox’s Dhaka office, said that Bangladesh’s young population, rock-bottom costs and tax exemption for IT companies make it an ideal destination for venture capital. –Alex Derber

Ysios undeterred by bank flight

Barcelona-based Ysios Capital has reached an initial close of €52 million ($64 million) for its second life sciences fund despite a collapse in support from one of its main investor classes.

Spanish banks, about half the LP base of Ysios’ 2008-vintage, €69 million fund, have now almost entirely withdrawn from the venture class, leaving other institutional investors to take up the slack.

Pension funds account for roughly one-third of Ysios’ fund to date, while the government ministry’s public technology fund has committed €18 million ($22 million).

The first close still arrived later than hoped for, as Ysios had wanted to wrap up its first two deals earlier in 2014.

Ysios invests from early- to late-stage in the pharmaceuticals, diagnostics and medtech sectors, and expects to close its new fund by September 2015 at €100 million ($124 million). –Alex Derber

London mayor prompts capital cooperation

London authorities hope to attract £60 million ($94 million) of private funding for local tech businesses via a new co-investment fund.

From a list of 38, six investors have been chosen to partner the fund, which has been anchored with £25 million ($39 million) from the Mayor of London’s office.

Those selected are: AngelLab, an early-stage VC; Crowdcube, a crowdfunding platform; Firestartr, a seed investor; London Business Angels, an angel syndicate; Playfair Capital, a microcap VC; and Wellington Partners, a Series A-focused firm that also manages a seed fund.

Each partner is expected to invest significantly more than half of any deal, although Mayor of London money is permitted to account for up to 49 percent of an investment. –Alex Derber

IQ concentrates on $94 mln ECF

The first firm to benefit from new European rules regarding government-backed venture capital can start investing following a £42 million ($66 million) first close.

IQ Capital’s second enterprise capital fund (ECF) can invest up to £5 million ($8 million) per round instead of the £2 million that was previously permitted under state aid regulation.

The Cambridge-based firm hopes to close the fund at £60 million ($94 million) by April 2015.

Its main LP is the British Business Bank, which has committed £25 million ($39 million) alongside more than £17 million ($27 million) from private individuals who include technology entrepreneurs and business leaders.

Offering early-growth and seed capital, the fund will target technology and B2B businesses across the United Kingdom, seeking co-investment from sector experts where possible.

It builds on the £25 million that IQ raised for its debut fund in 2007. –Alex Derber

Singapore fund fancies piece of Chinese action

China’s booming media sector has caught the eye of Singaporean growth equity firm Tembusu Partners, which wants to raise $100 million to back media companies, content producers and technology providers.

Yu Dong, founder of Nasdaq-listed Bona Film Group, and Calvin Cheng, a Singaporean entrepreneur a former parliamentarian, will co-lead the fund.

“China’s media and entertainment industry is forecast to overtake Japan’s by 2018 to become the second-largest in the world,” Yu in a statement.

Fundraising is expected to commence in April 2015, with anchor commitments from Bona Film and Chia Thai, a Thai agricultural business. –Alex Derber

Hoxton goes Green

Just a year after its own launch, microcap venture firm Hoxton Ventures is branching into Ireland via a partnership with state investor Enterprise Ireland.

The London-based firm is setting aside €3.5 million ($5.2 million) to buttress a €6 million ($7.4 million) fund that will target about five investments in Irish IT companies.

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Ireland

Source: REUTERS

Girls dressed from head to toe in the colors of the Irish flag and with faces painted to match, enjoy a St. Patrick’s Day parade and festival in Dublin.

Hoxton’s money comes out of its main fund, though founder Rob Kniaz said that “it was an easy decision for our LPs to make because they saw the attractiveness of the matching capital from the Irish government.”

Based in London’s “Tech City,” Hoxton focuses on opportunities in London, Berlin and Stockholm, and had deployed about a third of its $40 million flagship vehicle across nine deals prior to the launch of its Irish Sub Fund. –Alex Derber

Chinese angel fund makes the grade

The man widely known as “China’s richest teacher” has launched a new angel investment fund to back Chinese startups in the consumer, healthcare, education and mobile sectors.

Yu Minhong made his fortune teaching English to Chinese students preparing to study abroad, and his new venture may retain an international flavor by directing some funding towards Silicon Valley.

According to Chinese media, the RMB200 million ($33 million) fund is backed by several prominent Chinese venture capitalists and hedge fund managers, including Hillhouse Capital founder Zhang Lei, SAIF Partners founder Andrew Yan and IDG Ventures founder Xiong Xiaoge. –Alex Derber

Convergence Accel to target early-stage in Indonesia

Indonesia’s booming tech sector has fresh capital chasing it following a $25 million first close of the debut venture fund from Jakarta-based Convergence Accel.

The digital media, ecommerce and mobile-focused fund has already made two investments. The firm said it plans to invest from 25 to 30 companies over the next five years.

Initial investments will range up to $500,000, with about $1 million reserved per company for follow-on funding.

“Young tech startups in Indonesia are at lower valuations than in other parts of the world, about one-tenth of those in China, for example, but we are seeing valuations increase,” said Partner Adrian Li. –Alex Derber

Sequoia eyes 15th venture fund

Sequoia Capital said it is raising a 15th venture fund, according to a regulatory filing. The filing did not list a target for Sequoia Capital U.S. Venture Fund XV. An initial sale has not yet taken place.

Polaris raises $450 mln

Polaris Partners has raised $450 million for its seventh fund, according to an announcement on its site. The LPs were not disclosed. Polaris Partners VII will focus on technology and healthcare.

McKesson launches healthcare venture fund

McKesson Corp, a provider of healthcare services and information technology, has launched McKesson Ventures, a new healthcare-focused venture fund. Tom Rodgers will serve as the fund’s managing director and head the investment activity.

Previously, Rodgers worked at Cambia Health, where he led the firm’s venture investing efforts.

SherpaVentures to scale with $250 mln fund

Scott Stanford and Shervin Pishevar of SherpaVentures are raising $250 million for SherpaEverest Fund, according to a regulatory filing.

Last year, the pair raised their first Sherpa Ventures Fund at $150 million.

Versant beats target, raises $305 mln

Versant Ventures has raised $305 million for its fifth venture fund, beating its initial $250 million target. The San Francisco-based firm focuses on healthcare startups in North America and Europe.

New York State launches $50 mln venture fund

New York State is launching a $50 million venture fund to back early-stage regional businesses. The New York State Innovation Venture Capital Fund will focus on IT and life sciences. Empire State Development will administer the fund.

Compiled by VCJ staff