It’s typically founders who have the ‘move fast and break things’ mentality. And now, it seems, so do some VCs.
But in a climate where late-stage reigns, huge venture rounds abound and companies continue to prolong their moments of reckoning under the harsh light of public-market scrutiny, market conditions are forcing investors’ hands.
This is the game now: Raise big funds fast, or go home.
So far this week three venture capital firms unveiled fresh supplies of dry powder, to the tune of just over $4 billion. Let’s start with the smallest and move our way up from there.
Scale Venture Partners: $400 Million
On Tuesday morning, Crunchbase News covered Scale Venture Partners‘s announcement of its sixth flagship venture fund. Out of its $400 million new capital pool, Scale will continue to write Series A and Series B checks and launch a new open-source platform for startups to compare themselves against industry benchmarks.
Index Ventures: $1.65 Billion
In a Monday post to the firm’s site, Index Ventures announced that it had raised $1.65 billion across two funds: a $650 million venture fund (the firm’s ninth) and $1 billion in a growth-focused fund. For reference, the firm’s seventh and eighth venture funds (announced June 2014 and February 2016, respectively) were each $550 million, and Index’s second growth fund (announced in April 2015) was just slightly larger than $700 million.
The announcement gives some details about the firm’s timeline. The decision “that it was time to raise new funds” was made in April 2018 during Index Ventures’s annual meeting in London, the post explains. The firm closed out its capital-raising campaign at the end of June, $1.65 billion in hand.
Lightspeed Venture Partners: $1.975 billion
In late-breaking Tuesday news, Reuters reported that Lightspeed Venture Partners has raised $1.8 billion for its latest fund. The initial SEC paperwork—a somewhat uncommon dual filing for “Lightspeed Venture Partners Select III, L.P.” and “Lightspeed Venture Partners XII, L.P.”—went through on March 26. At that point, the firm stated in its filing that no capital had yet been raised. The time between initial filing and Tuesday’s announcement is a mere 106 days.
Three Firms. Six Funds. $4.025 Billion. It’s Only Tuesday.
Crunchbase News is no stranger to covering big new funds recently. Here are just a few examples:
- In March, we broke news that Khosla Ventures aims to raise $1.4 billion across two funds.
- Also in March, we covered filings which showed General Catalyst raised $1.375 billion for its ninth venture fund
- In May, we found that DCM Ventures is targeting $750 million for its ninth fund as well
- That same month, we dug into filings showing Foundry Group was also raising $750 million for a new fund
- In June, we wrote about filings that suggest True Ventures is raising $650 million across two new venture funds
And we’ve covered a number of trends, such as the weight super-giant funds are putting on the market and the outsized success incumbent venture firms have in raising funds. And although there are times when two firms from the same city announce their biggest-ever funds in the same week, like Boston-based OpenView and CRV did in May.
But this business of announcing billions in new funds, from many firms, all within the same rough 36-hour window, is not something we’ve experienced before. Let this be your friendly reminder that this isn’t normal.