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TCV Closes Year’s Biggest VC fund

Technology Crossover Ventures (TCV) last week announced that it closed its sixth fund with $1.4 billion in commitments, making it the largest tech-focused, VC fund of the year, based on data from the National Venture Capital Association and Thomson Financial (publisher of PE Week).

The venture firm now has $4.7 billion under management. The fund is also a significant increase in size from its previous fund, TCV V, which was closed just last year at $900 million.

The latest fund will continue to make expansion and late stage investments in technology companies. Its “crossover” model of investing includes investing in its portfolio companies “at the IPO and beyond,” well after most VCs have exited.

This strategy is why it requires a larger fund size than early stage funds.

The limited partners in the new fund include European and North American public and private pensions, university endowments, financial institutions, family offices and individual entrepreneurs, according to the Palo Alto, Calif.-based firm.

Founding General Partner Jay Hoag said in a statement that the fund received a strong response from both new and existing limited partners.

Returning limited partners confirmed to be in the new fund include the California State Teachers Retirement System, the Hillman Family Trust and the New York State Teachers’ Retirement System.

Other LPs that have backed TCV funds in the past include BancBoston Capital, California Public Employees’ Retirement System, General Motors Corp., Hewlett-Packard Co., New Mexico State Investment Council, and Rho Management Co.

Rick Kimball, a founding general partner of TCV, says that returning LPs make up the vast majority of investors in TCV VI.

He says that fund V should be completely invested by the end of this year or early next year and that the new fund will take three or four years to invest.

The firm has increased its staff since the closing of its last fund. TCV now boasts an investment staff of 23, including 10 partners. Most recently, TCV added Robert Trudeau as a general partner in September. Trudeau, who is based in New York, was previously a principal at General Atlantic.

TCV was founded in 1995 and has made investments in more than 150 companies. Of those, TCV says that 37 have launched IPOs and 29 were involved in strategic sales or mergers.

The firm says that 14 of its last 15 deals were in companies outside the San Francisco Bay area.

Among its recent investments is Zillow.com, a Seattle-based provider of online real estate services, which also received backing from Benchmark Capital. The amount of funding was undisclosed, but the secretive startup was founded by former executives of Expedia, a discount online travel planning website in which TCV invested $50 million.

Email Matthew.Sheahan@thomson.com