Sapphire Ventures raises $2bn as mega-firms continue to go large

Growth-stage investor Sapphire Ventures has become the latest mega-firm to amass multi-billion-dollars in new commitments.

The firm, which makes Series B and later-stage investments in enterprise tech companies, announced today its largest fundraise to date, raising $2 billion in capital for its flagship Sapphire Ventures Fund VI and other vehicles. In total, Sapphire raised more than $1.7 billion for Fund VI and the remainder is for its third opportunity fund, according to a source familiar with the matter. The latest fundraise does not include Sapphire Sport, created by Sapphire Ventures to focus on sports tech, and which was seeking $150 million for its second fund, according to a regulatory filing.

Sapphire’s $2 billion fund news comes nearly 10 months after the firm announced it raised $1.7 billion for its previous family of funds.

The firm says it now has $8.8 billion in total AUM. Sapphire has altogether raised about $3.9 billion in the last five years, according to the VCJ 50. The ranking report, released earlier this month by Venture Capital Journal, puts Sapphire as the 18th-largest venture firm worldwide, based on commitments over the previous five years, as of June 30, 2021.

Sapphire’s fresh capital comes in a year marked by record fundraising, thanks to ever-larger fund sizes and an expansion of strategies. This includes adding new stage-focused funds as well as launching sector-specific vehicles.

Insight Partners – the top fund manager in the VCJ 50 – has already raised about $20 billion for its growth equity flagship vehicle Insight Partners XII, beating its $12 billion target, according to two sources with knowledge of the fundraise.

New York growth equity investor Tiger Global Management – third on the VCJ 50 – said it had raised more than $7.7 billion so far for Fund XV, according to a regulatory filing, which is its largest fund to date.

In addition to its crypto funds, Andreessen Horowitz raised a $3.2 billion growth fund and a $1.3 billion flagship fund, each closed in 2020, helping to rank it as the fourth-largest firm on the VCJ 50. AH added a $400 million seed-stage fund to its arsenal earlier this year.

New Enterprise Associates this month filed regulatory documents to raise $6.6 billion combined for two separate funds. NEA ranks as the eighth-largest firm worldwide, according to the VCJ 50, and the firm, much like Sapphire, is following a similar fundraise strategy to other large managers of raising multiple funds, soon after the previous vintages.

LPs have tell VCJ they worry the current pace of fundraising is too rapid, with new and larger fundraising rounds coming too close to the last. LPs fear they will not be able to keep up. While no immediate data is available on how close each funding round is to the previous one, anecdotally, some LPs worry about the acceleration.

The robust fundraising by mega-firms is why US-based firm venture fundraising has reached $96 billion through the first three quarters of 2021, already surpassing the record 2020 total of $85.8 billion, according to PitchBook.

As it did with its previous fundraise, Sapphire Partners also announced several personal appointments, some of which were previously disclosed.

• Kevin Burke, vice-president VP of strategy
• Ralph DeBernardo, head of investor relations, partner
• Cristina Hohlman, chief financial officer
• Ellie Javadi, chief marketing officer
• Chloe Steinberg, partner, Sapphire Sport
• Krupa Vankayala, vice-president of people and HR
• Rico Mallozzi, vice-president of platform, Sapphire Sport

Update: The story above was updated to indicate the firm raised more than $1.7 billion for Fund VI.