NEA raises $3.2 billion fund; Sequoia makes flurry of investments in India

Venture investing in tech companies may have been way down in the first quarter of this year, but not to worry, all you fitful startups: venture firms were taking a break so they could focus on raising absolutely gigantic funds to invest this year.

New Enterprise Associates, a global venture capital firm with offices in Menlo Park, announced Wednesday it has raised $3.2 billion to invest in tech companies. The new funds include a $2.8 billion core fund, the firm’s 15th since its founding nearly four decades ago, and $350 million for what the firm calls an Opportunity Fund, or a separate pocket of capital intended to funnel more money into select, later-stage investments.

“As a growing number of companies are scaling faster but staying private longer, large venture growth rounds are increasingly prevalent,” said NEA managing general partner Scott Sandell.

The new fund marks NEA’s fourth-consecutive $2.5-billion-plus venture fund, and is the largest reported fund raised this year. Until now, Bessemer Ventures had raised the biggest fund reported at $1.6 billion.

The scale of NEA’s new fund signals the firm is taking a different direction in investing than other VC outlets. Several firms are raising smaller funds, hoping to make more targeted investments in early-stage companies. Menlo Ventures, for instance, announced today a $400 million fund with a $15 million allocation for seed-stage investments — a far cry from the $1.5 billion funds the firm used to raise.

But with hedge funds and big banks getting involved in late-stage tech investments, VC firms will need bigger funds if they want to participate in the later funding rounds. Think Uber’s two $1.2 billion funding rounds last year.

In other venture news, Sequoia Capital seems particularly keen on India these days. On-demand grocery delivery startup PepperTap, based in the Indian city of Gurgaon, announced Tuesday it had raised a $10 million Series A with help from Sequoia. It was the second PepperTap investment for Sequoia, which also gave the startup a $1.2 million seed round.

Also on Tuesday, Indian delivery startup Grofers announced it had raised a $35 million Series B from Sequoia Capital. Grofers, also based in Gurgaon, provides on-demand delivery in less than 90 minutes of products from local brick-and-mortar merchants.

According to CrunchBase, Sequoia has invested in 21 India-based companies this year — a big pickup over the 14 India deals it closed in all of 2014.

Illustration from Thinkstock

 

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