Though opinions vary as to whether tech companies and the venture capitalists that fund them are on track to keep activity afloat, at least one fund has been successful in raising interest and dollars in the tech realm.
As reported by Bloomberg on Friday (Dec. 11), Foundation Capital, which has been active in the online lending and FinTech space — including investments in OnDeck Capital and Lending Club — recently closed a $325 million fund. As the newswire reported, the latest funding round will go to seed a new venture vehicle that will be known as Fund VIII. And, as partners at Foundation told Bloomberg, the latest funding round was “quicker and easier” than its previous fund, which was raised two years ago. As noted by Paul Holland, a partner in the firm, “a lot of people were still hiding under their desks from the great recession,” adding that “there were a lot of burnt fingers.”
And, in essence, as investors climb what might be termed a wall of worry, there has been a new batch of vigor for tech funding, as venture capital firms as a whole were able to raise as much as nearly $23 billion through the end of the third quarter, possibly on pace for the $30 billion seen for all of 2014 and far better than the annual average of $17 billion seen from 2009 through 2013, according to data compiled by both Bloomberg and the National Venture Capital Association.
Yet, noted Bloomberg, the size of the new fund is not indicative of a sweet spot in venture capital, as most of the funds that do get inflows are mega- or micro-funds. “We are seeing a winding down and contraction of some of those midsize firms,” Bobby Franklin, president and CEO of NVCA, told the newswire. “The bigger firms keep getting bigger, and there are more and more micro-VCs out there.” Foundation will be focusing its new vehicle on energy, finance and marketing companies.
[bctt tweet=”Investors may be climbing a wall of worry.”]
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