Mayfield Raises $525M For Two Funds
Mayfield has invested in startups for many years, but it is now branching into later-stage investing, too.
The Silicon Valley venture firm has raised $525 million across two new funds—a $400 million early-stage fund, Mayfield XV, that is consistent in size and focus with its three previous funds, and a $125 million later-stage fund called Mayfield Select.
The Select fund is a first for Mayfield and lets the firm invest in companies “that are turning out to be long balls and are going to become independent and require more capital from early-stage investors,” said Mayfield Managing Director Navin Chaddha.“Winners can come from anywhere, and this is for winners who are going all the way.”
The road to an IPO is longer than it used to be, and Mayfield discovered that by not investing in later-stage rounds, it was “leaving money on the table for LPs [Limited Partners] in areas where we could create very high returns for them,” Mr. Chaddha said.
The Select fund permits Mayfield to reinvest in Mayfield portfolio companies from its 13th, 14th and 15th early-stage funds, which are largely focused on Series A rounds. In some cases, Mayfield will also use the Select fund to co-invest with the 15th fund in companies that are new to Mayfield.
“Later rounds require bigger check sizes which we couldn’t invest in from the early-stage funds, and these are opportunities we might have missed,” he said.
Other early-stage venture firms have also noticed chances to invest in later-stage funding rounds as companies stay private longer. Menlo Ventures this week announced a $250 million opportunity fund for “early growth” Series B and C rounds, which partners will invest alongside Menlo’s 12th fund.
Both of Mayfield’s funds were oversubscribed, according to Mr. Chaddha, and were raised in about two months. He said the 12th and 13th funds performed well enough that they have already been fully distributed to LPs.
“If they put in $1 of capital, they already got more than $1 back, and there’s still upside left. That made it easy to reup,” he said.
Mayfield’s investing team remains the same for the new funds. In addition to Mr. Chaddha, it includes Rajeev Batra, Tim Chang,Ursheet Parikh and Robin Vasan.
Recent exits include the cybersecurity company Elastica Inc., which was acquired by Blue Coat Systems Inc. in November for $280 million.
First appeared at WSJ VC