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What Pullback? Lightspeed Venture Partners Doubled Early-Stage Fund

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Bay Area-based Lightspeed Venture Partners announced its largest fund to date—$7 billion—in early July as the global venture capital markets pulled back.

Of that $7 billion, the firm’s commitment to seed through Series B funding rounds has more than doubled from previous years to $2 billion. This distribution highlights an overall trend we’ve noticed of firms devoting more investment to early stage.

Lightspeed’s previous fund of $4 billion, announced in April 2020 when the pandemic was in full swing, included $890 million dedicated to funding startups with seed through Series B rounds. The two prior early-stage funds were around the $700 million mark.

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Clearly, its commitment to early stage has shifted.

But it’s not alone. Lightspeed is among several other firms to announce record multibillion-dollar early-stage focused funds in 2022.

Other funds announced this year include:

Worth noting, is Sequoia Capital’s recent fund for $750 million for U.S. early-stage commitments. Although not as large as those mentioned above, it’s still significant.

Deals led at early stage

So far this year, Lightspeed was the lead investor on 25 seed through Series B deals. Deal counts and amounts peaked in the first quarter with $647 million raised across 17 deals, per Crunchbase data. In the second quarter, the firm closed on eight deals with $285 million raised.

Lightspeed led an average of 10 deals at seed and early stage in 2021 per quarter. So far in 2022, the team led an average of 13 deals per quarter. 1

Some of the largest fundings this year at early stage hail from Lightspeed’s European team. Paul Murphy, previously at Northzone, joined the team in September 2021, signaling an increased commitment to investing in Europe.

Investments this year include U.K.-based fast delivery service Zapp, which raised a $200 million Series B from a cohort of lead investors, and London-based Payhawk, an expenses management platform founded in Bulgaria, that raised a Series B extension of $100 million.

Lightspeed invested heavily in health care this year at Series A with investments led in three Massachusetts based companies Triana Biomedicines, Seismic Therapeutic and Satellite Bio.

Growing the team

As part of its funding announcement, the firm confirmed it has 70 investment team members with offices in 12 cities in six countries across the U.S., China, India, Israel, Europe and Southeast Asia.

Lightspeed Venture Partners raised $6.6 billion across three different stage global funds and a separate fund for its India office of $600 million. Approximately $2 billion is for its Series A and B practice, $2.3 billion for existing portfolio companies—and some new investments—and a further $2.4 billion for breakout companies.

The firm also announced its crypto assets under Faction which it has been investing in since 2013. Amongst its largest crypto investments are Blockchain, Alchemy and Offchain Labs.

With ever larger funds raised in 2022 by multistage venture firms, early-stage funding is looking to get more competitive, despite the pullback.

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This reflects data as of July 25, 2022, based on disclosed funding rounds in Crunchbase.

Illustration: Dom Guzman

  1. This does not include investments made by Lightspeed China Partners or Lightspeed India Partners.

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