US early stage venture capital firm Greycroft Partners has raised $175m for its latest fund, Greycroft III.
The firm said Greycroft III was “substantially oversubscribed”, but held to its original hard cap.
Virtually all of Greycroft’s previous investors committed to the new fund, including JP Morgan, BlackRock Private Equity Partners, Fairview Capital, and Invesco Private Capital.
The firm also added a number of new foundations and educational institutions, as well as managers such as Hall Capital, Hamilton Lane, Greenspring Associates, and Cambridge Associates on behalf of their clients.
“We have invested in Greycroft Partners since 2009. Their team has demonstrated that small funds can represent attractive investment opportunities,” said Russ Steenberg, global head of BlackRock Private Equity Partners.
“Greycroft’s portfolio companies benefit from hands-on assistance and access to an extensive network of media and technology experts that can help them grow into successful and long-lasting businesses.”
Greycroft’s $75m first fund invested in 34 companies.
Fund I has sold 11 companies at a profit, returning more than 130 per cent of committed capital to its limited partners to date.
Unrealised investments including Collective, Extreme Reach, uSamp and WideOrbit.
“Our strategy was unconventional when we launched Greycroft in 2006,” says Ian Sigalow, general partner at Greycroft.
“Many believed that venture capitalists should take board seats in every deal and invest as much as possible in a concentrated set of companies.
“Instead we focused on building investor syndicates, even if it meant less equity for Greycroft, and finding capital efficient businesses.
“This approach has resonated with entrepreneurs as well as co-investors and our limited partners.”
Greycroft II, which closed in April 2010, was capped at $131m and funded 32 companies.
“The fund has yet to have any realisations from a portfolio that includesKlout, Tagman, Pulse, and Maker Studios, among others.
“We have a strong existing relationship with Greycroft Partners and are pleased to continue our support in Fund III,” says Larry Unrein, global head of the private equity and hedge fund groups at JPMorgan Asset Management.
“We are committed to the small fund strategy which promotes investment in unique and innovative leading technology companies.”
Greycroft III will follow the same strategy as the previous two funds, focusing on internet and mobile companies with an emphasis on smaller Series A rounds in capital efficient businesses.
This investment strategy is aimed at producing venture-type returns independent of the IPO market, it said.
Greycroft initially participated only in companies with some commercial traction, but with the introduction of Fund II initiated a small seed programme that is dedicated to repeat entrepreneurs in its ecosystem.
“We are very proud of what we’ve built in a short period of time,” said Dana Settle, General Partner at Greycroft.
“We are grateful to our existing investors and new investors who have made the fundraising part of our jobs extremely efficient so that we can stay focused on what we do best, investing in best of breed companies in our markets and growing the firm.”
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