PALO ALTO, Calif. – MeriTech Capital was slated for an early November wrap on $1.1 billion for its inaugural later-stage venture fund.
The vehicle, created last spring by Accel Partners, Brentwood Venture Capital, Oak Investment Partners and Worldview Technology Partners, will provide funding for the maturing portfolio companies of its sponsoring funds (VCJ, April, page 5).
Initially launched with a $750,000 target, the goal quickly was boosted to $1 billion. The vehicle notched about half that amount in a first close in June (VCJ, June, page 26), and by press time, MeriTech had backed a dozen companies, said Managing Director Paul Madera. They include:
* Corvis Corp.,a Maryland-based optical-switching company from Worldview’s portfolio, which received a $20 million investment from MeriTech.
* GetThere.com Inc., formerly the Internet Travel Network, a Mountain View, Calif. company from Brentwood’s stable, which got an $8 million investment;
* 2nd Century Communications, a Tampa, Fla. data- and voice-telecommunications service provider targeting the small business market. The Accel portfolio company received a small investment from MeriTech, Madera said, declining to specify the amount.
* Wireless Facilities Inc., a San Diego-based, Oak-backed company that provides radio frequency engineering and planning for wireless networks, which got $25 million from MeriTech.
For the dozen completed deals thus far, investment sizes are averaging in “the mid-teens,” Madera said. Wireless Facilities had filed to go public by press time, and Corvis, GetThere, 2nd Century and Wireless Facilities all are within a year of holding an IPO, he added. MeriTech’s management team – including Managing Director Mike Gordon, Vice President Rob Ward and Associate Janet Heiss – plans to invest the $1.1 billion vehicle over two to three years, Madera said.
Most of the capital for Meritech was raised from the limited partners of its four sponsoring venture firms, but about 20% of the money came from outsiders – those that approached MeriTech directly and investors Madera knew from his previous work as an investment banker.
Limited partners include: General Motors Investment Management Co., HarbourVest Partners, Horsley Bridge Partners, J.P. Morgan Investment Management, the state pensions of New York and Michigan, FLAG Venture Management and the University of Notre Dame endowment, Madera said.
Brentwood Venture Capital and Institutional Venture Partners recently divided their groups and formed two separate firms, one focusing on IT and the other on health care (see story, page 20). Brentwood and IVP will continue to invest existing funds and manage portfolio companies. Brentwood maintains its relationship with MeriTech, and MeriTech will have a relationship with the new Brentwood/ITVspawned IT-group, Redpoint Ventures, which would benefit MeriTech because it allows the group to tap into the expertise of IVP members who previously were not affiliated with MeriTech.