LP roundup: Tech and software funds are the soup du jour for venture LPs

Pensions, sovereign wealth funds and universities alike announced more than $320m worth of commitments to the sector in Europe and the US.

As sectors like travel and hospitality have fallen out of favor this year amid the pandemic, tech and software funds have remained top of mind for LPs as many continue to commit capital to those areas.

From sovereign wealth funds to government-backed development funds, LPs announced more than $320 million of commitments to various vehicles in the sector across all stages and established and emerging managers.

The Engine, an early-stage VC fund that spun out of the Massachusetts Institute of Technology, raised $230 million toward its second fund, with a little help from local universities. MIT itself made a $35 million anchor commitment to its homegrown fund. Harvard University, located just half a mile away on Mass. Avenue, also tossed a $25 million commitment to the vehicle.

The fund focuses on “tough tech” in areas such as climate change, human health and advanced systems. The first vintage grabbed $205 million in 2017.

The government wants in

European tech funds also grabbed capital from multiple regional government-backed economic development funds.

British Patient Capital, a wholly-owned subsidiary of the British Business Bank, invested $35 million into Evolution Technology Fund II. Zurich-based Evolution Equity Partners invests across stages into tech companies in areas like cybersecurity and enterprise software. The entity has invested more than $336 million into venture this year.

The European Investment Fund, backed by the EU, was active in venture during Q3.

The LP announced three commitments, of an undisclosed amount, to tech and software managers from its July meeting. EIF committed to Seaya Venture’s third vehicle, which focuses on early-stage tech primarily in Spain, TEV Ventures Vintage III, a late-stage tech fund focused on the DACH region, and Social Impact Ventures NL Fund II, a vehicle targeting impact-driven tech companies primarily in the Netherlands.

EIF also committed to Jeito S, a French multi-stage life sciences fund that is seeking €100 million.

SWF goes for scale

The New Mexico State Investment Council threw its hat into the ring last week and made its fifth venture commitment of 2020.

The SIC announced a $25 million commitment to Scale Venture Partners VII. The fund, which is reportedly targeting $500 million, is managed by early-stage investor Scale Venture Partners. The firm raised $400 million for Fund VI.

The LP has invested $80 million into the asset class so far in 2020.

A+ Growth

The New York State Teachers’ Retirement System made a re-up commitment to Menlo Park-based growth equity tech investor TCV during the third quarter.

The pension system committed $200 million to TCV XI, which is targeting $3.25 billion for late and growth stage tech investing. The pension has invested more than $400 million into the manager.