TCV sets record with $3bn fund close

Growth stage-focussed Technology Crossover Ventures has closed its seventh fund on $3 billion, causing Oak Investment Partners to lose the record for the largest fund ever raised by a VC firm.

Technology Crossover Ventures has more than doubled the size of its previous fund and set a venture industry record with the close of its seventh fund at its hard cap on $3 billion (€2.1 billion). The fund's initial target was $2.25 billion.

With $3 billion, you can make a lot of LPs happy…

Mark Heesan

According to the Silicon Valley firm, TCV VII is the largest tech-focussed venture fund closed this year, but according to data from the National Venture Capital Association, it is the largest fund raised to date by a venture capital firm. The previous fund which held that designation was Oak Investment Partners’ 2006 fund, which closed on $2.56 billion.

“It’s a big fund. It’s unusual – you don’t see many of these anymore,” said Mark Heesan, NVCA president. As many VC firms have intentionally shrunk fund sizes in recent years, it has created “a pent up demand for limited partners getting in to what they perceive as the best funds”, he said.

“With $3 billion you can make a lot of LPs happy,” he continued. “The proof will be in whether they can make the returns and we won’t know that for another eight to 10 years.”

TCV VII received commitments laregly from existing investors like public and private pension funds from North America, Europe and Asia, including the Illinois State Teachers’ Retirement System, the Los Angeles County Employees’ Retirement System and the New Mexico Public Employees Retirement System. LPs also include university endowments, financial institutions, family offices and technology entrepreneurs.

The fund’s investment strategy is that of its predecessors: To invest between $20 million and $200 million in late-stage tech companies in the internet, financial technology, infrastructure and communications, healthcare IT and software and services sectors. Companies TCV has backed in the past include tech news site CNET, web-based movie rental firm Netflix and online dating service eHarmony.

The closing brings the 12-year old firm’s total capital under management to $7.7 billion. Its previous fund closed on $1.4 billion in November 2005.