Goldman Sachs Unit Invests in Plaid, Databricks Company Stakes

Venture capital (VC) firm NEA has reportedly created a $540 million continuation vehicle that has drawn as investors Goldman Sachs Group’s alternatives unit, Industry Ventures, Pathway Capital Management and Goanna Capital.

The transaction enables NEA to give its limited partners some liquidity at a time when alternative-asset managers are working to distribute cash to institutional investors amid a lull in exit activity, Bloomberg reported Monday (July 15).

The vehicle includes stakes in 11 companies in NEA’s portfolio, including Databricks, Plaid and Tempus, according to the report.

Databricks accounts for about 38% of the vehicle, while Plaid comprises 10%, per the report.

It was reported on July 3 that venture funding reached its highest quarterly total in two years in the second quarter, driven by artificial intelligence (AI) projects.

With venture capital investments coming to $55.6 billion, the quarter saw a 47% increase over the $37.8 billion startups in the U.S. took in during the first quarter.

Among the contributors to the second quarter’s total were major investments in AI firms, including the $6 billion raised by Elon Musk’s xAI and the $1.1 billion raised by CoreWeave.

VC funding hit a record high of $97.5 billion in the closing quarter of 2021 and a record low of $35.4 billion in the second quarter of 2023.

While the recent trend marks a recovery for VC funding, the initial public offering (IPO) market remains tepid.

On July 10, VC firm Index Ventures announced that it raised $2.3 billion for AI projects, saying it would divide that into two funds: $800 million earmarked for early-stage startups and the remainder for latter-stage companies.

Index has studied the impact of AI on fields ranging from accounting to molecular research to data center optimization.

On July 8, Geneva-based VC firm Forestay Capital announced the closure of its second fund at $220 million, saying Forestay II will focus on investments in the enterprise AI and software-as-a-service (SaaS) sectors, targeting early-growth companies typically making lead investments in the $10 million to $15 million range.

The company’s first fund, Forestay I, invested in 13 companies, with three achieving unicorn status (valuation exceeding $1 billion) and two acquisitions.