BlueRun Calls On Nokia No More

Corporations often drop their venture units. Every once in a while, though, it is the VCs who distance themselves from their corporate overlords.

Such is the case with BlueRun Ventures, a global, early stage venture firm that recently dropped the named Nokia Venture Partners like a bad habit. The move came as the firm announced that it held a first close on its third fund. The amount of commitments it has raised was undisclosed, but the revamped firm is aiming to raise $350 million.

But in announcing the first close, the firm inched farther from Finnish cell phone company Nokia Corp., which was the only limited partner in the firm’s inaugural $150 million Nokia Ventures I fund in 1998 and the provider of half its $500 million Nokia Ventures II fund, which closed in 2000.

The new brand, says BlueRun Managing Partner John Malloy, is “representative of our venture model of investing globally in early stage companies. Blue represents the globe. Run is what we do around it.”

He’s not exaggerating. In addition to BlueRun’s main offices in Menlo Park, Calif., and Helsinki, Finland, where Nokia is based, BlueRun also maintains offices in Washington, D.C., London, Israel, India, Hong Kong, Japan and South Korea.

Asia and Europe accounted for slightly more than 40% of the investments made through its last fund, with a small portion going to Israel and 40% invested in U.S. companies. “We believe this type of split is likely to occur also in Fund III,” Malloy says.

Malloy concedes that the firm was moving away from Nokia for some time and that it needed a new moniker to avoid confusing people. That’s because in December, Nokia announced a $100 million late-stage fund called Nokia Growth Partners (NGP) in which it is the only investor. The new fund is focusing on investments in companies that are doing, or about to do, business with the cell phone giant, unlike BlueRun which Malloy stresses was never a business development arm for Nokia.

General partners Markus Salolainen in London and Rob Trice in Menlo Park are managing NGP. They each worked for BlueRun for four years when it was Nokia Ventures.

Malloy says that in choosing the name BlueRun, his firm will be free from the perception that it is a strategic arm of Nokia.

However, BlueRun will still maintain a relationship with Nokia. BlueRun is not disclosing what percentage of its newest fund is coming from Nokia, but the company remains BlueRun’s biggest LP. Without naming names, the firm has said that its other investors include fund managers, universities and pension funds. Outside investors in fund II included BMC Software, CDBWebTech and Goldman Sachs Group.

Malloy says that the final closing of BlueRun III will likely happen during the summer. He says that BlueRun will be announcing some recent hirings soon.

Email Constance.Loizos@thomson.com