Secondary market investor Industry Ventures raises $425 mln fund

The San Francisco-based firm, whose past investments include popular online services Twitter Inc, Facebook Inc and Pinterest, also closed a $200 million “special opportunities” fund, which it can use to supplement investments from the main fund.

Industry Ventures plans to invest the money in a mix of Internet, software, healthcare and cleantech companies over the next two to three years, said founder Hans Swildens.

Investing in private companies by acquiring shares from employees and early investors has become increasingly common in recent years, even as some companies have tried to clamp down on trading of their shares in the secondary markets.

Swildens said his firm has benefited from the trend, as companies looking to control transactions in their shares on the secondary markets turn to established buyers.

“Increasingly they want to be involved with who is going to be the new shareholder and they want to be more engaged in the process,” he said.

Alexei Oreskovic is a reporter for Reuters News in San Francisco