Updata Partners nears $225M target

Updata Partners upped the target of its fourth balanced stage fund to $225 million and is nearing a final close on its largest fund to date, according to a regulatory filing.

The firm launched its fourth fund in February 2007 with a $200 million target and quickly closed on more than $152 million in commitments from 13 accredited investors by mid-March. Six months later, the Reston, Va.-based firm had raised $218.8 million from 23 investors and upped its target to $225 million.

The new vehicle represents a 45% increase over the firm’s $154.5 million 2004 vintage fund.

Updata is one of several firms to raise money in the mid-Atlantic region so far this year. It joins Baltimore-based JMI Equity, which raised $600 million for its JMI Equity Fund VI expansion fund; Baltimore-based QuestMark Partners, which raised $260 million for Questmark Partners III late stage fund; and Radford, Va.-based Third Security, which raised $250 million for its New River Management V fund, according to Thomson Financial (publisher of PE Week).

The area looked as though it was on its way to a resurgence this time last year, after Vienna, Va.-based Valhalla Partners successfully raised $264 million after only about two months of fund-raising, and Washington, D.C.-based Novak Biddle Venture Partners raised a $227 million fifth fund. Each fund was about 50% greater than its firm’s last fund.

But deal activity in the mid-Atlantic region slowed in 2007. Venture capitalists put just over $1 billion to work in 168 startups during the first 10 months of the year, according to Thomson Financial. In 2006, the region saw 208 companies collect $1.52 billion in venture investment.

Updata has sold a handful of its portfolio companies over the last three years, according to Thomson Financial.

They are:

• Digital protection company e-Security, which had raised $40 million in venture funding, and was sold to Novell for $72 million in April 2006;

• Development company Secure Software, which had raised $14.5 million in VC, and was bought by Fortify Software for an undisclosed amount in January 2007;

• Mobile Internet communications software maker Ecutal Systems, which had raised $16 million, and was sold to Smith Micro Software for $8 million in January 2007;

• Enterprise software maker V3 Systems, which raised $11.5 million, and was acquired by Optum Inc. for an undisclosed amount in February 2004;

• Credit software maker GetPaid, which had raised $11.25 million, and was bought by SunGard Data Systems for an undisclosed amount in October 2005;

• Data management company Softech Storage Solutions, which had raised $25 million, and was sold to IBM for an undisclosed amount in January 2007;

• and project management software maker Changepoint, which had raised $9.5 million, and was acquired by Compuware Corp for $100 million in April 2004.

Updata contracted with New York-based Sparring Partners Capital as its placement agent. Sparring recently helped Boston-based OpenView Venture Partners raise its first fund.