Partech International, which has lost three partners and three associates since spring 2006, has found its latest fund coming together slowly.
The San Francisco-based firm held a first close on $96.5 million in August 2006 for an early stage fund, but it was only able to raise $39 million more as of August of this year, according to regulatory filings. It is still less than halfway toward its goal of $300 million for Partech International Ventures V. It raised raised about $300 million for its previous early stage vehicle in 2000.
Limited partners in the new fund (which lists an entity named 50th Parallel as its general partner) include 1133 West LLC and Mellon Bank, as a trustee for the Bell Atlantic Master Trust.
Partech Partner Tim Wilson declined to discuss fund-raising, citing regulatory concerns. But a former investor for the firm tells VCJ that poor returns are causing some LPs to be reticent to invest.
The fund-raising may also have been hampered by the departure of several key staffers. “Very often when you have a situation like that, the LPs are saying, ‘Gee, why don’t you pay attention to what you’re doing now instead of coming back to market right now,’” says Kelly DePonte, a placement agent with Probitas Partners. (None of DePonte’s clients is an investor in Partech.)
Partech has seen three of its partners leave since March 2006. At that time, Partner Glenn Solomon, a late-stage pro, left to join Granite Global Ventures. Later that year, Kevin Carrington, who had managed Partech’s late stage and public equity investments since 2001, also departed. And in August of this year, Partner David Welsh left Partech after seven years with the firm, joining antivirus maker McAfee Inc. as executive vice president of corporate strategy and business development.
Partech has also lost some up-and-coming junior investors: Associate Ren Chin, who cut his teeth developing Brightmail, left last year to join Storm Ventures as an entrepreneur-in-residence; Associate James Buford, who joined Partech from Battery Ventures, left last summer to work in business development at Amazon; and Associate Mike Brown, who brought Partech RockYou, Wazap, mSnap Interactive and other new Internet investment opportunities, left earlier this year to become a principal at Foundation Capital.
In addition, the firm parted ways with Christina Oropeza, its marketing and communications manager for seven years. She now works as a recruiter at Insight Recruiting.
Partech’s website currently lists 16 team members: two managing partners, five partners, three principals, one associate, three venture partners and two finance people.
The firm has had some recent success, primarily in selling companies to strategic acquirers:
- French business process management software maker Cartesis sold to Business Objects in April for $305 million. The startup had raised $55.6 million as part of a buyout deal in 2004 by Partech, APAX Partners Worldwide, Advent Venture Partners, AXA Private Equity and CDP Capital-Technology Ventures.
- Residential gateway software maker Jungo Software Technologies sold to NDS Group for $107 million, including earn outs, in December. Jungo had raised $17.5 million from Partech, Intel Capital, TeleSoft Partners and Cipio Partners.
- Mobile network company SoloMio sold in October 2006 for an undisclosed amount to Openwave. The startup had raised $26.5 million from Partech, Austin Ventures, Koch Ventures, Techxas Ventures, Gemplus and AV Labs.
- Software testing company Akimbi sold to VMware for an undisclosed amount in June 2006. The startup had a post-money valuation of $20 million in 2005 after its $8 million Series B, according to Thomson Financial, publisher of VCJ.
Partech saw two of its companies launch IPOs last year: telemedicine software developer Visicu (Nasdaq: EICU) floated a $96 million IPO in April 2006, while bandwith management company Allot Communications (Nasdaq: ALLT) completed a $78 million IPO in November 2006. Viscu had previously raised $18.25 million from Partech and other VCs, while Allot attracted nearly $28 million. —Alexander Haislip