Investors in Seattle and beyond continue to be bullish on a renaissance in business computing, raising funds to back enterprise software companies, as national fundraising for venture firms hits pre-recession levels.
Late last week, we reported on Ignition Venture Partners’ new “annex” fund, which could top out at $60 million (only $16.8 million raised so far), to make follow-on investments in companies the Bellevue, WA-based venture firm backed out of its 2007-vintage fourth fund.
Meanwhile, a five-year-old firm called Tola Capital has raised $202.7 million of a possible $225 million “Tola Ventures” fund, according to an SEC filing. The firm “focuses on the once-in-a-generation opportunity to invest in the next wave of enterprise software companies enabled by new data and cloud platforms,” as Tola Capital puts it on its website.
Tola is an effort of former Microsoft application platform and developer marketing general manager Sheila Gulati. “As we are in the midst of an offering, we cannot comment,” Gulati says via e-mail.
“We look for software companies with essential products for enterprise customers, a solid existing customer base, a strong competitive position, and great talent and culture,” Tola’s website says. “Tola Capital invests predominantly in growth stage and some early stage enterprise software companies.”
The Seattle-based firm lists 15 companies on the portfolio page of its website, including Indix, Space Curve, and OSIsoft. It also suggests the firm has already realized some exits, including Opstera, acquired by Avanade; Applied Predictive Technologies, acquired earlier this year by MasterCard; Cumulux, acquired by Aditi Technologies; and Hybris Software, acquired by SAP.
Tola was established in 2010. In addition to principal and managing director Gulati, Tola is run by principal and chief operating officer Stacey Giard, also a former Microsoft marketing leader; investment manager Aaron Fleishman, whose Microsoft roles included financial analyst and corporate strategy and M&A for enterprise software and search; and CFO Tashi Schmidt.
U.S. venture firms have had no trouble attracting investors to their new funds, according to a report out last week from the National Venture Capital Association.
During the second quarter, VCs raised $10.3 billion across 74 funds. That’s the most cash in a single quarter since before the Great Recession. (The fourth quarter of 2007—around the time Ignition wrapped up its fourth fund—saw VCs raise a little more than $10.4 billion.)
Through the first half of 2015, the U.S. venture capital industry has raised more than $17.7 billion.
“If this pace continues, we are certainly on track to surpass total fundraising for all of 2014 [$30.7 billion across 263 funds] in what we hope is a more favorable environment across the venture industry, not just isolated at the top among a few marquee firms,” said NVCA president and CEO Bobby Franklin in a news release. “What this all means is that fundraising is finally scaling up to the level of venture investment we’ve witnessed over the past few years, and the institutional investors are recognizing the great opportunities to invest in the next generation of American companies.”
There are, of course, other views of the market. We took a look at some of the talk about a tech bubble in this roundup last week.
