Valley Climbs to $41M –

Targeting software, semiconductor and life sciences companies in the Southwest, Valley Ventures has closed on $41.2 million for its third venture capital fund, Valley Ventures III.

The firm, formerly known as Arizona Growth Partners LP, was founded in 1985 by general partner John Holliman and closed its first venture fund in 1993 with $10 million under management. Its debut fund was followed by a second fund offering in 1999, the $29.4 million Village Ventures II that marked the firm’s expansion into New Mexico. Now the firm, which is based in Scottsdale, Ariz., touts five general and special partners in Albuquerque, Scottsdale and Tucson and is extending its reach to investments in Colorado, Southern California, Texas and Utah with the launch of its third fund.

Although its reach has grown along with the size of its partnership, Valley Ventures will maintain its traditional mix of early and late-stage technology investments in its third fund. It expects to put 40% of its investment capital to work in early-stage deals that total between $2 million and $5 million, investing about $1 million of its own capital in each deal. The remainder of its portfolio is to be invested in later-stage companies, says General Partner Gregg Adkin.

Already, the fund holds four companies in its portfolio: High-Throughput Genomics, a Tucson biotechnology company; NewMonics, a Tucson IT company; Regenesis Biomedical, a Scottsdale biotechnology company; and CellzDirect, a Tucson biotechnology company. Those companies were originally held by Tucson Ventures, a firm managed by Lawrence Aldrich that merged with Valley Ventures and is a limited partner in Valley Ventures III.