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Focus Ventures closes fund III on $255m

The Silicon Valley venture capital firm has raised $255m for its third fund, almost half the capital committed to its predecessor vehicle.

Palo Alto, California-based venture capital firm Focus Ventures has held a final close of its oversubscribed third fund, reaching its hard cap of $255 million (€203 million).
 
The fund is significantly smaller than its predecessor, Focus Ventures II, which closed in December 1999 with $465 million in capital commitments. The firm’s debut vehicle raised $106 million in October 1997.
 
“We made a conscious decision to have a smaller third fund and instituted a hard cap on the cover size, reflecting our discipline on valuation and our strategy of only investing in the best expansion-stage companies in partnership with the leading VCs here in the Valley,” said Kevin McQuillan, general partner at Focus Ventures, in a statement.
 
New York and London-based MVision Private Equity Advisers acted as placement agent to the fund in Europe. Hussein Khalifa of MVision told PEO that Focus Ventures wanted to internationalise its investor base and have long-term relationships with institutional investors in Europe. He added that approximately 20 percent of commitments to the fund came from Europe, with the rest coming predominantly from the US, although Focus Ventures also has long-term Asian investors.
 
Khalifa said MVision was appointed purely to bring in European investors and no placement agent was used in the US.
 
Focus Ventures typically makes investments of $3 million to $15 million in privately-held companies in the communications, semiconductor, software and internet sectors. According to Khalifa, the firm only invests in Silicon Valley companies that have been seeded by top-tier US venture capital firms such as Sequoia Capital, Benchmark Capital and Kleiner Perkins Caufield & Byers.
 
Founded in 1998, Focus Ventures is run by general partners McQuillan, Steven Bird, James Boettcher and George Bischof. The firm currently has $826 million of assets under management and has invested in 89 companies since inception.