Uber backers NEA, Menlo Ventures raise large venture funds

[April 15, 2015]  By Sarah McBride

SAN FRANCISCO (Reuters) - New Enterprise Associates has raised $2.8 billion for its 15th fund while Menlo Ventures has raised $400 million for its 12th, the venture-capital firms announced Wednesday.

In addition, NEA raised another $350 million for later-stage investments.

The raises show continued investor appetite for big-name venture funds even amid the slowing market for initial public offerings, the preferred exit for venture investments.

NEA’s separate late-stage vehicle, the Opportunity Fund, will co-invest in the large growth funding rounds that are increasingly common as deep-pocketed mutual funds, hedge funds and others back later-stage private companies.

“Some of the financing rounds are big enough that you have to be able to speak for a $100 million check or a $50 million,” said Scott Sandell, who has been promoted to managing general partner at NEA as part of the launch of the new funds. Peter Barris, the firm’s existing managing general partner, also will continue in that role, the firm said.
 

NEA partners approved the first investment from the $350 million Opportunity Fund on Monday, Sandell said, declining to disclose the target company.

The firm is known for investments in technology, health care and energy. Its last flagship fund, NEA XIV, totaled $2.59 billion in 2012.

NEA XV grew beyond that in part because of investor demand and in part because an internal analysis of much cash each investment partner could individually deploy indicated they should work with a larger sum, Sandell said.

For Menlo Ventures, the new fund marks its first since 2010, when it raised Menlo XI at $400 million, at the time a steep drop from the $1.2 billion it raised for Menlo X in 2005.

The firm’s reputation has mounted in recent years due to investments such as video-monitoring company Dropcam, which sold to Google Inc’s Nest last year for $555 million, and ride-hailing app Uber, which is valued at more than $41 billion. NEA is also an Uber investor.

Those consumer-oriented investments represent a shift for Menlo, which previously skewed toward enterprise companies, said managing director Mark Siegel in an interview last week.

“We are transitioning to being 50 percent consumer, 50 percent enterprise,” he said.

Both firms are considered venture pioneers, with Menlo Ventures founded in 1976 and NEA in 1977.

(Reporting by Sarah McBride; Editing by Lisa Shumaker)

[© 2015 Thomson Reuters. All rights reserved.]

Copyright 2015 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.