Charles River Wraps $500M Fund X

Providing the latest example of the astonishing pace of venture capital disbursements, Charles River Ventures held a final close earlier this month on the $500 million Charles River Partnership X. The capital committed to this fund nearly triples the $175 million Charles River Partnership IX, which closed in 1998.

“We are not changing anything in our strategy,” said Izhar Armony, a general partner with the firm. “This is a reflection of the market, and it takes more money to get start-ups going.”

Armony added that the firm has added investment professionals over the course of the last year and promoted internally, increasing partner level staff to six. He also cited the ongoing land grab in business-to-business and business-to-consumer sectors, which is forcing venture firms to target and heavily finance entrepreneurs earlier in the investment cycle.

Armony said the firm would continue to focus its investment efforts on b-to-b e-commerce marketplaces, e-commerce and information services as well as data communications and networking equipment, software and services. Since the first close was held in November, the firm has made several investments through the new vehicle, including Global Food Exchange (PEW Feb. 21, p. 8), River Delta Networks and

Charles River has targeted non-profit foundations and endowments as its limited partners since the firm was founded in 1970. Limited partners have included Memorial Sloan Kettering Cancer Center, Welcome Trust and Harvard University. Armony said the firm opened its doors to two new non-profit groups for this fund. In addition, Charles River has a side fund that constitutes entrepreneurs the firm has invested with in the past.

The Boston-based firm has raised more than $680 million in the past 18 months.