DFJ holds ‘one and done’ close on $325m fund, exits cleantech sector


closed-locked-shut-padlock-doorDraper Fisher Jurvetson has closed its early-stage-focused Fund XI on $325m after two months in the market, and decided to exit the cleantech sector.

PEHub reported the fund managed to net a number of existing and new investors along with new college endowments and a few chief executive officers and founders ‘in some of the biggest tech companies’, managing director Josh Stein said.

Existing LP San Francisco Employees’ Retirement System committed $25m to the fund last month.

Officially launched in late November last year, Fund XI hasn’t yet begun investing but could make its first investment in the next month, Stein said.

The latest fund is slightly smaller than Fund X, which the firm closed in 2008 with $350m in commitments – shy of its $400m target, according to data from Reuters.

DFJ closed on more than $650m for its ninth fund in 2007 and more than $400m for its eighth vehicle in 2004 – an early-stage investor in online cloud sharing and data storage company Box which is now gearing up for a $500m IPO.

The fund has seen modest returns, with a 1.11X investment multiple.

DFJ is now looking at downsizing its funds after deciding ‘bigger is better’ is no longer true for the industry.

Stein said, “The era of bigger is better in venture is coming to an end.

“A lot of top funds that could be raising a lot more capital are being very disciplined on the right amount for their strategies.”

Stein said the smaller amount of capital in the new fund will affect the way DFJ invests, for instance the new fund will have a majority focus on North America rather than being distinctly international.

Further to this, the firm has been winding down its offices in India and China.

Under its new strategy, DFJ will also be cutting out certain sectors like clean tech from its investment focus.

“We’ve tried to focus the firm and our efforts on what we think we’ll be best at,” Stein said. “We wanted to have a smaller, more focused team.”

Copyright © 2014 AltAssets