Fund briefs, July 23, 2007

Bessemer raises $1B, plans India push

Bessemer Venture Partners

announced last week that it has raised more than $1 billion in closing Bessemer Venture Partners VII. The Larchmont, N.Y.-based firm says that the oversubscribed fund includes $350 million that is earmarked for investments in India. Bessemer opened its offices in India three years ago and has invested in 12 Indian companies to date.

In connection with the fund, Bessemer has boosted its India investment team by adding Partners Anil Sarin (former co-head of equities at Prudential ICICI Asset Management), Sridar Iyengar (former chairman and CEO of KPMG India and former president of TiE), Mandeep Khaira (former senior executive of Dell India) and Yagnesh Sanghrajka (former global CFO of HTMT, a subsidiary of the Hinduja Group).

“India has been an exciting investment opportunity for us,” says Rob Chandra, a managing partner at Bessemer. “Just as we saw the long term opportunity when we went to Silicon Valley in the 1970s, we see a similar opportunity in India driven by the growth in middle class prosperity and innovation.”

Bessemer raised the $1 billion from such LPs as its longstanding investor, Bessemer Securities Corp., the Phipps family office. New limited partners include leading family offices, universities and foundations, the firm says.

Highway 12 raises $75M

Highway 12 Ventures

announced last week that it has raised $75 million for Highway 12 Ventures II. Fund II will continue the Boise, Idaho-based firm’s strategy of making early stage investments in the states of Idaho, Utah, Colorado and Montana. The firm typically invests between $250,000 and $3 million in a first round and up to a total of $5 million in each of its portfolio companies.

Highway 12 Ventures has made four investments from fund II, including an investment alongside Benchmark Capital and Shasta Ventures in Logoworks, a Lindon, Utah-based provider of logo design services for small businesses. In April, Hewlett Packard announced that it would acquire Logoworks for an undisclosed price.

Fund I, which raised $25 million, debuted in 2001 and invested in 11 companies, including @Last Software, a provider of 3D design software acquired by Google last year; Attensity, a developer of text analytics; and OpenLogic, which offers support and services for open source projects.

In addition to the repeat participation of all fund I investors, including the Public Retirement System of Idaho, new institutional investors include The Montana Board of Investments, Darwin Ventures and The Utah Fund of Funds.

Highway 12 founder and Managing Partner Mark Solon is joined on the fund by returning General Partners Mike Mers and Phil Reed.

Piper Jaffray moves swiftly fund IV

Piper Jaffray Private Capital is merging its clean technology fund of funds with its main fund of funds for its next vehicle, which is coming to market shortly.

The firm remains in “herding-cats mode” for its previous fund, according to a source close the firm, rounding up limited partners for an anticipated Sept. 30 close on the $250 million Piper Jaffray Private Equity Partners III. The vehicle is fully committed to buyout, venture and distressed funds managers.

But already Piper Jaffray Private Capital, an arm of Minneapolis investment bank Piper Jaffray, is moving ahead with a successor fund of funds, according to our source. With that vehicle, investors can choose whether to back buyout funds, cleantech investments, direct investments or venture firms, the source said.

Adding cleantech to the main fund of funds is a new twist for Piper Jaffray Private Capital. Earlier this year, the firm closed on a $60 million cleantech-only fund of funds, Piper Jaffray Cleantech Ventures, which is already fully committed. The firm decided to blend the its next cleantech fund into a diversified private equity fund of funds because LPs want more diversity, the source says.

Piper Jaffray Private Equity Partners IV does not yet have a target size. The fund of funds plans to back 10 cleantech managers, and five of them have already been identified, including the $250 million-targeted Technology Partners VIII.

Vector ends road to $1.2B

Vector Capital has closed its fourth fund with $1.2 billion in capital commitments. The San Francisco-based firm closed its prior fund with about $350 million in 2004, but decided to bulk up after more and more of its deals required large co-investments from limited partners. For example, Vector provided a $60 million equity check when taking Corel Corp. private in August 2003, but only $20 million came from Vector’s actual fund.

Spark raises second fund

Spark Capital has closed its second fund with $360 million in capital commitments. The Boston-based venture firm raised $262 million for its inaugural fund in 2005, and focuses on media, entertainment and technology industries.

Northgate aims for $200M

Northgate Capital

is raising up to $200 million for its fifth general fund of funds, according to a regulatory filing. It already has secured around $57 million in capital commitments from such LPs as The Broad Foundation. The Danville, Calif.-based firm also features dedicated VC, buyout and emerging markets funds of funds.

Aussie firm targets over $2B

Pacific Equity Partners

of Australia is raising up to $2.27 billion for its fourth fund, according to a regulatory filing. It already has secured more than $963 million. The firm focuses on buyouts and late stage growth financings in Australia and New Zealand.

Dace raises $75M

Boston-based Dace Ventures has raised $75 million from limited partners for its inaugural fund, according to VentureWire. The firm, created by former CMGI President David Andonian, split the commitments into two funds—Dace Ventures I ($25 million) and Dace Parallel Fund I ($50 million). The firm did not name LPs, but Tudor Ventures invested $50 million. Dace Ventures invests in early stage software developers and wireless communications.