Alloy Ventures Hits $300M Goal

Alloy Ventures, an early and seed stage investor in health care and information technology, managed to close its Alloy Ventures 2002 Fund on target.

The Palo Alto, Calif.-based firm was looking to raise $250 million to $300 million for this fund and closed last week on the high end with $300 million. The fund, which is Alloy’s fourth, hit the fundraising trail in January. Like its predecessors, the new fund will be split evenly between the IT and health-care sectors.

The new fund will increase the firm’s total capital under management to more than $800 million. Its last fund, which was raised in 2000 and is fully vested, totaled $230 million.

“The only thing we will be doing differently is reserving a little more capital for follow-on investments than we have in the past,” says Craig Taylor, a general partner at Alloy. “We typically initiate the relationship on the first round and continue to invest over the next several rounds.”

When all is said and done, Taylor expects to invest about $10 million to $12 million over the life of approximately 25 investments. The fund is expected to be fully committed in two- and-a-half to three years.

“It’s a good time to be investing. The number of companies is smaller, so they are typically staffed with better people, prices are lower and companies are being more careful with their capital,” Taylor says.

Alloy’s LPs are a mix between institutions and families. One of Alloy’s longtime LPs, the Pennsylvania State Employees’ Retirement System, has committed $25 million to the new fund and has been an investor in Alloy since its last fund.

Alloy traces its roots back to Asset Management Associates (AMA), founded in 1965 by legendary venture capitalist Pitch Johnson. It changed its name from AMA to Alloy in April 1999.