Sierra Ventures Closes $215 Million For Oversubscribed Twelfth Fund

One of the more established firms in the venture business raised fresh cash for its latest VC fund.

Founded in 1982, San Mateo-based Sierra Ventures announced on Thursday afternoon that it raised $215 million for a twelfth fund.

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The firm said that “[the] fund was oversubscribed and the prior fund’s institutional investors increased their commitment to the new fund.”

In a filing with the SEC from March, the firm disclosed its intent to raise $175 million. Now, four months later, the firm raised all that plus $40 million more.

“We are very appreciative of the continued support we have received in Sierra XII from our existing investors, as well as excited to add some leading Limited Partners in this fund. We are proud to have some of the best endowments, pension funds and corporations from across the world on our roster,” said the firm’s managing director, Mark Fernandes, in a statement.

Fund XII is the largest Sierra Ventures has raised in the past decade. Fund XI, announced in 2016, topped out at $170 million. The firms largest funds, historically, were closed during times of market exuberance. The firm raised $500 million for Fund VIII in 2000, just as the dot-com bubble was beginning to crack; Fund IX, totaling $400 million, was closed in 2006 in the lead-up to the great financial crisis.

Like with the firm’s prior two funds, Fund XII will be led by Mark Fernandes, Tim Guleri, and Ben Yu, who have worked together for 17 years, according to a statement from the firm. The new fund will carry on the firm’s investment strategy of taking stakes at seed, Series A, and select Series B rounds “in companies that show high potential revenue growth.”

Sierra Ventures’ most recent exits include computational orchestration and acceleration startup BitFusion.io, which was acquired by VMWare this past Thursday. Back in May, DataDirect Networks announced its pending acquisition of Nextenta Systems, in which Sierra Ventures had been an investor since at least the company’s Series C round.

In its announcement for its latest fund, Sierra Ventures cited other exits as well. “Interest in Fund XII was driven by the continued success of Fund X (2012) portfolio companies, with nine notable exits to date including Treasure Data (ARM) and RedLock (Palo Alto Network), both acquired in late 2018 for a cumulative purchase price of almost $800 million,” the firm said.

The firm’s most recent investments include participation in stealth networking startup Zycada Networks’ Series A, text analytics suite Text IQ’s Series A, and Austin-based digital learning platform Interplay Learning’s Series A.

Ben Yu, a managing director at the firm, cited Sierra Ventures’ prior investments in marketplaces, machine learning, and emerging technologies like 5G wireless, AR/VR, and robotics. “In Fund XII, we will continue to seek innovations in these areas. In particular, we believe AI and blockchain will become the horizontal platform technologies that cover both enterprise and consumer needs, touching almost everything we do,” he said.

With Fund XII, Sierra Ventures has raised and managed over $2 billion since its inception.

Illustration: Li-Anne Dias