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The
fund is the second for Canvas Ventures, which spun out of
Morgenthaler Ventures, and provides the firm with nearly twice
as much cash to invest. Canvas's first fund, raised in 2013, was
$175 million.
"We will have more shots on goal with this fund," said Rebecca
Lynn, partner at Canvas Ventures.
Canvas Ventures makes early stage investments of about $5
million to $20 million per company, with an emphasis on
financial services or so-called "fintech" startups, healthcare
technology, online marketplaces and artificial intelligence. Its
previous investments include marketplace lending company Lending
Club Corp. <LC.N>, which went on to raise more than $1 billion
in its 2014 initial public offering; mobile payments company
Check, which was acquired by Intuit <INTU.O>; and Wifi camera
company Dropcam, which was acquired by Alphabet's Google <GOOGL.O>.
While other venture firms raise billion-dollar funds, Canvas
believes it can offer better returns to limited partners - the
pension funds, family offices, endowments and foundations that
invest in venture capital - with a fund under $400 million. One
big exit, such as Lending Club, can provide the full return
limited partners are looking for, Lynn said.
Lynn, widely considered a pioneer for women in the
male-dominated venture capital industry, invests alongside Gary
Little, a former Apple employee who has invested in startups
since the 1990s, as well as partners Paul Hsiao and Ben Narasin.
Canvas adds to a flurry of venture fundraising this year.
Venture capitalists raised $8.8 billion in the second quarter,
down from a whopping $14 billion in the first quarter but still
keeping this year on track to be the biggest for venture capital
fundraising since 2001.
"We're seeing new funds come out, lots of new funds," Lynn said.
"It would concern me more if all this money was raised but there
wasn't this next wave of technology innovation to support it.
(But) there is a lot happening in technology."
Limited partners, as a result, are running out of cash to
invest. Canvas started raising its fund in October 2015, but
many limited partners did not have money available to invest
until 2016, Lynn said. Canvas's fund closed in June.
This year is even worse, she said, with many limited partners
already tapped out and delaying further investments until 2017.
(Reporting by Heather Somerville; Editing by Andrea Ricci)
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