2018 is shaping up to be a banner year for venture capital fund-raising. In the looming shadow of SoftBank’s $100 billion Vision Fund, many established VC firms are raising money in ever-larger funds in an effort to stay competitive in deal negotiations.
It looks like Menlo Park-headquartered DCM Ventures may be the latest VC firm to join in on the trend.
Filing For Fund IX
According to an SEC filing posted early this afternoon, the 22-year-old venture firm indicated it will begin raising its ninth flagship fund, appropriately called “DCM IX, L.P.” The filing suggests DCM hasn’t yet closed any LPs for the fund. But considering that many funds Crunchbase News has recently reported on end up raising more than their target fund size, it’s likely DCM will raise its three quarters of a billion dollars for Fund IX.
It would be DCM Ventures’s largest single investment vehicle to date. The chart below displays data from Crunchbase, verified when possible with available public filings, for the size of DCM Ventures’s flagship funds to date.
Alongside its numbered flagship funds, DCM Ventures also raised $150 million for a “Hybrid” fund in 2011, a $170 million “Growth-stage fund” in 2016, three funds in its “A” series, and, most recently, a comparatively small $17.45 million pool for what appears to be the first in a series of surgery-focused funds. (A list of DCM Ventures’s funds in Crunchbase can be found here.)
DCM’s Exit Track Record To Date
If DCM Ventures is able to raise its ninth fund in full, it will have closed over $4 billion across more than a dozen venture funds (not including special purpose vehicles) since its inception in 1996.
DCM Ventures maintains offices in Menlo Park, Tokyo, and Beijing, and has made investments in a number of companies Crunchbase News has covered in the past, including customer support startup UJET’s $25 million Series B round and “full-stack” autonomous vehicle company Pony.ai’s $112 million Series A, among others.
Many of the firm’s exited companies are based in Asia, but not exclusively so. Here are some of the bigger exits from DCM’s portfolio from the past few years:
- Location-based instant messaging company Momo acquired Chinese dating app Tantan for $600.9 million in February 2018.
- Chinese social recommendation system Toutiao bought Santa Monica, CA-based Musica.ly for $800 million in November 2017.
- In 2016, wireless communications infrastructure provider Inteliquent, based in the Chicago area, was sold to GTCR, also for $800 million.
Since 2016, several other companies in DCM’s portfolio have been acquired by the likes of Airbnb, Baidu, Alibaba, and IBM.
What This Means
If there’s one thing to take away from this, it’s that DCM’s ninth is not alone in the club of big 2018-vintage funds.
For more established firms like Sequoia Capital, Norwest Venture Partners, Khosla Ventures, General Catalyst, Foundry Group, and indeed DCM, raising funds that approach or surpass $1 billion is basic table stakes these days.
Obviously, there’s a long way to go from initial filing to writing the first check out of a fresh Fund IX. It’ll be interesting to see just how fast it can close.
Illustration: Li-Anne Dias