When St. Paul Venture Capital (SPVC) split into a pair of independent firms in July 2004, it was announced that each group planned to raise solo funds within a year. The firms are now making good on that promise.
Split Rock Partners was the first to market last November, and recently capped its inaugural effort with $275 million. The Minneapolis-based firm features a Menlo Park, Calif.-based office, and plans to make early-stage IT and life sciences investments in the Upper Midwest and California. Most of its IT deals will be in the software and services spaces, with around 75% of its life sciences disbursements going to medical device makers, and the remaining 25% earmarked for specialty pharmaceutical companies.
The fund-raising activity was run internally by Managing Director Jim Simons, while all four of the firm’s managing directors (Allan Will, Dave Stassen, Michael Gorman and Simons) participated on the road show. Split Rock did not use a placement agent.
“We’ve been actively focused on fund-raising since [the SPVC breakup], and have 36 active companies in our portfolio,” Gorman says.
He adds that Split Rock added its first portfolio company at about the same time that the fund closed. It’s a startup formed in partnership with medical device incubator The Foundry, and does not yet have a name.
The firm also last week generated some serious exit buzz, when former SPVC portfolio company LowerMyBills.com was acquired by GUS PLC subsidiary Experian for up to $380 million (see Exit Watch, page 8). SPVC had led a $7 million second-round deal for LowerMyBills.com in late 2000.
Split Rock is not disclosing any limited partner information, except that former parent company St. Paul Travelers Cos. made a substantial minority commitment. The Minnesota Board of Investments also confirmed that it participated.
Vesbridge Making Headway
Meanwhile, the other half of the SPVC, Vesbridge Partners, which invests in early-stage networking and IT infrastructure companies from offices in Westborough, Mass. and Minnetonka, Minn., is in the second month of its fund-raising drive. Vesbridge expects to raise upwards of $250 million.
Zenas Hutchinson, Vesbridge’s senior managing director, declined to discuss fund-raising due to SEC restrictions, but a source close to the situation says that the firm has met with about 25 prospective LPs and has either completed, or planned, between seven to 10 follow-up meetings. It also has a $50 million commitment from St. Paul Travelers.