TCV Gives New Meaning To ‘Minority Investment’

Earlier this week, we ran a standard press release about Technology Crossover Ventures’ (TCV’s) newest investment in Merkle, a 39-year-old Columbia, Md.-based customer relationship marketing agency that employs 1,200 people. Though the transaction amount wasn’t disclosed at the time, the funding was characterized as a ho-hum “minority investment.”

Turns out it was one hell of a minority investment. According to an SEC filing uncovered by the sleuths at FormDs.com, TCV has sunk $75 million into the company, which works with big-league clients like The Hartford Financial Services Group, for example, to bolster its ROI on direct mail by using Hartford’s customer data to optimize its messaging.

TCV typically invests anywhere from $20 million to $150 million in its portfolio companies, buys stakes in private companies roughly 80 percent of the time, and invests in two ways: either after a boatload of money has already been raised, or when a mature enterprise has never raised a penny.

In fact, TCV managing director Jay Hoag has told me the firm far prefers the latter scenario because it’s easier to find a strong company at a decent valuation when TCV invests alone. The firm has no problem going outside of Silicon Valley to find what it considers the best deals. Besides going to Maryland for Merkle, it also traveled to Mount Pleasant, S.C., a few years ago to invest $60 million in Automated Trading Desk, then an 18-year-old stock trading software company.

TCV is currently investing a $3 billion fund, closed in 2007.