NEA closes on $2.45B

New Enterprise Associates closed on $2.45 billion for its 13th fund in less than a year, during one of the most difficult times to raise capital in recent memory.

NEA made raising a massive fund look easy, even in the teeth of a major financial crisis. The firm started raising the fund in November 2008 and had secured more than $1 billion in commitments by January, according to reports. Still, the firm did back off from an initial target of $3 billion.

The new fund clocks in at the same size as NEA fund 12, which closed in 2006.

NEA 12 is in the black, according to records kept by the California Public Employee Retirement System. NEA has called down $29.5 million of CalPERS’ $50 million commitment. It has returned $2.4 million and estimates the cash out and remaining value of its commitment at $29.7 million as of the end of March, documents show.

So far this year, the firm has invested $350 million into 61 companies, according to Thomson Reuters (publisher of PE Week). The firm will likely finish the year committing less capital than it did in 2008, when it put $574 million into 93 deals.

NEA invests in “growth” stage companies, looking for large deals where it can deploy tens of millions of dollars at a stroke. The firm does not have a separate growth fund, a structure that such firms as Sequoia Capital have opted for, but allocated $1.5 billion of its previous fund to large deals. About 65% of the investments from NEA’s previous fund were expansion stage or growth stage financings and 35% were seed or early stage deals, according to data from Thomson Reuters.

“Common knowledge said you couldn’t scale this business. If so, it would be the only business in the world,” NEA General Partner and co-founder Dick Kramlich said in defense of fund 12’s size at a conference in 2007. “We pay attention to every dollar we invest.”

The firm added several investors in 2008. It hired Partner Tony Florence from Morgan Stanley and Paul Walker from MPM Capital to work on its growth investing practice. It also added Bala Deshpande as a senior managing director of NEA India; Hugh Panero, co-founder and former CEO of XM Satellite Radio was named a venture partner; and David Mott, former president and CEO of MedImmune, joined the firm as general partner.

NEA maintains an information technology focus. More than 60% of the deals it did in NEA 12 were IT companies. Health care and biotechnology companies accounted for one-fourth of the firm’s portfolio. Industrial and energy companies accounted for 10.5% of the firm’s deals, according to Thomson Reuters. —Alexander Haislip