Jackson Square Ventures Closes $193M Fund 3 Against $150M Target

Jackson Square Ventures, which invests in early-stage SaaS and marketplace startups, announced its third fund today, a $193 million vehicle.

The new fund is larger than its initial target for the capital pool ($150 million), and it is the San Francisco-based firm’s largest fund to date. The firm is keeping its prior leadership in place while adding a new partner. Notably, all the partners are men.  

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Many firms are raising more capital than before, a move that can allow a venture group to defend their ownership in investments that raise more capital later on and provide pricing flexibility.

Here’s Jackson Square’s new fund in relation to its preceding two, each of which weighed in around the $120 million mark, according to the firm:

It’s a pretty sizable jump in dollar terms ($73 million), and when measured in percent (just under 61, compared to $120 million).

Jackson Square has made 56 known investments to date, according to its Crunchbase profile. Its most recent investment was Lyte, a tech platform that enables fans to sell and exchange tickets to live events. Other investments include Strava, which connects athletes to each other, Tala Security, which protects enterprise sites from attacks, and Bus.com, a bus rental platform. 

‘Anti-Hype’

Part of Jackson Square’s investment philosophy is that it invests in anti-hype industries, as emphasized in its blog post announcing the latest fund. 

The firm, as detailed in the post, wants to invest in new technologies not when they are first put into the market, or when their “hype” takes off. For example, Jackson Square points to artificial intelligence and crypto as examples of industries that bubble up because investors don’t want to miss out on what their friends are investing in. 

Instead of jumping in on those trends, however, Jackson Square wants to invest “a bit later, in what Gartner calls the Trough of Disillusionment.” 

That means the firm wants to invest in tech when it’s at its least popular. So far the plan has worked well enough for the firm to raise a new, larger fund. We’ll know more as it begins to put the $193 million to work.

Why This Fund?

Why cover Jackson Square’s raise out of the mix of newly announced funds? (Crunchbase has a tally of new venture capital fund raises here.)

The chief reason is that the firm released a number of statistics regarding its performance: “6 of 59 core investments have achieved a $1B+ exit and/or valuation.” That gave us a chance to ask the firm about SaaS prices. Reached via email this morning, Jackson Square Managing Director Greg Gretsch said the following regarding SaaS valuations:

The larger market swings from fear to greed. When we are in a greed market, valuations are stronger and in a fear market, valuations are more conservative. We are still in a greed market, but there are signs that fear is creeping in.

All this in mind, recall that we’re still seeing a robust global venture market. It’s possible by Q4 we’ll see some of that fear translate into numbers. 

Illustration: Li-Anne Dias.