Accel closes $520m VC fund

With the closure of its tenth fund on $520 million, Accel Partners is slowly increasing its fund sizes again; post-dotcom crash, the firm downsized its eighth fund by more than half, having originally closed on $1.4 billion in 2000.

Accel Partners has closed its tenth, early-stage tech fund on $520 million (€354 million). It expects to deploy the capital over the next three years across sectors including internet, digital media, information technology and enterprise software.

“We are optimistic that there will continue to be positive drivers in both the enterprise and consumer segments over the next few years and believe we are well positioned to capture a large share of these opportunities,” Theresia Gouw Ranzetta, Accel general partner, said in a statement.

The fund close represents a ramping back up of fund sizes for the 24-year old Silicon Valley firm. Its previous vehicle closed on $400 million in 2004, but prior to that it was one of dozens of venture firms, including Kleiner Perkins Caufield & Byers and Redpoint Ventures, that was forced to shed significant amounts of limited partner commitments following the dotcom crash.

Accel twice cut the size of its eighth fund to rest at less than half the $1.4 billion it raised in 2000. In July 2003, it reduced Accel VIII to $680 million, after having already shrunk the fund to $952 million in May 2002. It originally wanted to cut the fund in half and keep the remaining $700 million for a future vehicle, but some LPs complained that plan would have tied up their capital for too long. As a result, Accel decided to refund commitments, including backdated management fees.

The venture firm noted that it has had 10 liquidity events greater than $100 million in the last year, including the $1.15 billion initial public offering of mobile phone service company MetroPCS, which was nearly a decade in the making and holds the record for the largest tech IPO to date this year.