Bain Capital Ventures has raised $1 billion to pour into technology companies large and small across a swath of industries, the largest single round of fundraising in the firm’s history.
The cash includes a $650 million core fund—that’ll be aimed half at early stage startups and half at later-stage growth companies—as well as a $250 million co-investment fund to fuel larger investments, and more than $100 million from partners at Bain Capital, the venture firm says.
The core fund is Bain Capital Ventures’ eighth; the last one closed in 2016 with $600 million. Since its first fund in 2001, the firm has invested $3.6 billion in 240 companies and helped its portfolio see more than $50 billion in exit value, the firm says.
“In many ways, we are doing what we did back then,” managing partner Ajay Agarwal tells Xconomy. “The strategy is working. We don’t want to make a massive change.”
In bold strokes, the firm’s prized strategy is to back technologies disrupting industries with developments in artificial intelligence, the cloud, and autonomy. Its current portfolio includes companies focused on software as a service, infrastructure software, security, commerce, fintech, and health IT.
Agarwal says while right now there’s probably too much hype over the current state of A.I., the potential is impressive.
“We are just getting started on the impact it will have on every industry in the world,” he says. “The last decade of cloud and data infrastructure being put in place, there is now this amazing amount of data that every enterprise and business is capturing. And the fascinating thing that we have seen is this step change on the power of machine learning and A.I. to be able to take that data and drive business results and insights.”
The $1 billion fund is just the latest reminder that there’s no shortage of capital for venture investments. In the first three quarters of 2018, venture firms have raised nearly as much as they did in all of 2017, according to data from the National Venture Capital Association. So far this year, five funds have closed above the $1 billion threshold. And more firms are taking less time to close new funds. The median time between fund closings is down to 1.9 years so far in 2018, from 2.1 years in 2017. Ten years ago, firms were waiting 3 years between closing funds.
Bain Capital Ventures, in recent years, has boosted its headcount and involvement in Silicon Valley, and it says it is now “evenly represented” across the major startup clusters there, or in New York and Boston. Agarwal says the new fund’s investors came mostly from the firm’s longtime limited partners, and many endowments and foundations.
The fund comes as Bain Capital Ventures has seen a raft of exits in the past few years, including Blue Coat, DocuSign (NASDAQ: [[ticker:DOCU]]), Jet.com, Rapid7 (NASDAQ: [[ticker:RPD]]), SendGrid (NYSE: [[ticker:SEND]]), SquareTrade, and SurveyMonkey (NASDAQ: [[ticker:SVMK]]).
