Spectrum Equity raises $951 mln for Fund VII

Firm: Spectrum Equity

Fund: Spectrum Equity VII

Target: $800 million

Amount Raised: $951 million

The growth equity firm has raised $951 million from 80 investors for Spectrum Equity VII, according to a July 3 SEC filing. Just last month it said it planned to raise $800 million. The new filing shows the hard cap for Fund VII as $1 billion.

The managing directors of the Fund VII general partnership are Brion Applegate, William Collatos, Randy Henderson, Christopher Mitchell, Victor Parker Jr., James Quagliaroli and Benjamin Spero, according to the filing.

With offices in Boston and Menlo Park, California, Spectrum Equity targets rapidly growing firms that are already profitable. Investments, which range in size from $25 million to $100 million of equity per deal, can be for either majority or minority stakes. Spectrum focuses on three sectors: Internet/digital media, software and information services, as well as traditional media and communication.

The firm’s previous fund, Spectrum Equity Investors VI LP, collected $680 million in 2010 while its fifth pool, in 2005, closed at $1.2 billion. Fund VI is generating an IRR since inception of 5.93 percent as of Sept. 30, according to the California State Teachers’ Retirement System. The fifth pool is producing a 17.10 percent IRR since inception, CalSTRS said.

GrubHub, a Spectrum portfolio company, raised $195.5 million when it went public in April. Other investments include SurveyMonkey, WeddingWire and BATS Global. In 2012, Spectrum also sold Ancestry.com to Permira Advisers for $1.6 billion. Spectrum made about 7x its money with the Ancestry.com sale, sister website peHUB has reported.

Lawrence J. Aragon is digital editor of the Reuters Deals Group. Additional reporting by Luisa Beltran, senior writer for peHUB.