Bay Partners fund closes at $475m

Bay Partners X has secured $475m with significant investments from European investors.

US venture capital firm Bay Partners, which focuses on early stage technology, has closed its latest fund, Bay Partners X, with committed capital of $475m. The fund will focus on infrastructure technology in the data networking, wireless and software categories.

The new fund has a more diverse group of investors than previous Bay Partners vehicles. Danske Private Equity, CDB Webtech, and the pension fund of UBS are representing Europe. Japan Telecom, NEC, and Kyocera are new strategic partners from Asia expected to bring specific technology expertise in networking, wireless and broadband solutions.

New US investors include Grove Street Advisors for CalPERS, Credit Suisse First Boston, and Merrill Lynch Ventures.

Bay Partners will look to invest primarily in seed and first professional rounds. Neal Dempsey, general partner of the firm, said: “Prior to starting the fund raising process, we determined what size fund was the best fit with our investment methodology. We invest only in early-stage infrastructure technology companies and have a disciplined operational approach toward helping them to be successful. To deliver on our promise to entrepreneurs, we felt it was critical to ensure we raised a fund that matched our philosophy.”

The fund will invest in approximately 35 to 45 companies over two to three years, with an initial investment size of $3 to $7m. The pace of investing is in part controlled by the individual capacity of each partner. The firm requires its partners to limit themselves to no more than eight active portfolio companies.

Bay Partners will continue to invest primarily in companies located in Silicon Valley and on the West Coast, making the most of the firm's access to top resources and professional contacts.

With the addition of Bay Partners X, the firm now manages over $1bn.