New Enterprise Associates (NEA), a global venture capital firm, announced that it had closed a $2.6 billion fund, the firm’s 14th and one of the largest ever raised in venture capital in recent times. This brings NEA’s total committed capital to more than $13 billion across all funds. The new fund also marks NEA’s third consecutive $2.5 billion-plus fund. NEA’s 2006 and 2009 funds, NEA 12 and NEA 13, raised $2.5 billion each.
The development comes at a time when the venture capital industry, in general, is consolidating and many of the lesser-known players are struggling to raise fresh capital. However, NEA’s successful fund close only goes to show how LPs are increasingly getting biased towards brand names.
“Our industry has been profoundly transformed in the recent years and a new model has quietly gained traction where more dollars are being committed to large funds that are global and diversified in nature,” said Peter Barris, NEA’s managing general partner.
“The venture capital ecosystem needs both large and small firms to thrive,” observed Barris. “But companies are scaling earlier and faster than ever before in a highly competitive global landscape, and they need partners with a global footprint and deep pockets to succeed,” he added in a statement.
As one fund moves to another, there is also a churn in its LP base. NEA has said that the composition of its limited partner group has also become more global. Dollars from international investors are up 10 per cent over the firm’s 10th fund, a 2000 vintage fund that coincided with NEA’s expanded focus on emerging markets, it said.
NEA has its main offices in Washington, D.C., and Menlo Park (California), and affiliate offices in India and China. The global venture capital firm has meaningful exposure in the country, having invested in companies like Airworks, Naaptol, Trishe Energy, ValueFirst and NephroLife, among others. At a global level, some of the firm’s investments include retailers Diapers.com and Gilt Groupe, daily deals site Groupon Inc, software company Salesforce.com Inc and video company TiVo Inc.
In terms of sectoral preferences, NEA says that it will continue to invest in IT, healthcare and energy sectors. Within the IT sector, its areas of specific interest include enterprise software and systems, education, consumer technology and digital media. The firm’s healthcare investing strategy continues to focus on opportunities in biopharma, healthcare services and medical device sectors.
(Edited by Sanghamitra Mandal)