Global private equity firm KKR has completed fundraising for its first tech fund, the Next Generation Technology Growth Fund, having raised $711 million. The firm began marketing the fund in September 2015.
A KKR spokeswoman declined to disclose the original target, but noted that the final amount exceeds it and includes about $200 million of the general partner commitment from KKR's employees and balance sheet.
Technology expertise is an increasingly valuable asset among multi-strategy private equity firms, as they seek to harness new technologies and avoid being on the wrong end of technological disruption. Earlier this year, Stockholm-headquartered EQT closed its first ever venture capital fund on €566 million. In February, CVC Capital Partners raised $1 billion for its first fund making growth investments in software and “technology-enabled” businesses.
KKR's fund, known as “NGT”, will invest in technology companies with proven business models – although not necessarily at the profit generation stage – in North America, Europe and Israel.
According to the spokeswoman, NGT invests in early-stage companies that aren't startups. They have technology or models that are proven but lack the capital and support of an established partner, or financial sponsor, to help catapult their growth.
Beyond financing, KKR said it offers its technology portfolio companies access to its “network, industry expertise, global reach” and portfolio companies with a combined annual technology spend of more than $7 billion and marketing spend of $10 billion.
NGT is part of KKR's technology, media and telecoms private equity group, which is led by Herald Chen and Richard Sarnoff in the Americas and Philipp Freise in Europe. Growth investments in the team are led by David Welsh, who joined KKR from Adams Street Partners in October.
KKR made “several” technology and media growth investments using balance sheet capital before raising the fund, the firm said in April. “Several warehoused balance sheet investments will be transferred into the fund, again illustrating the power of our balance sheet to accelerate fundraising,” the firm told investors at the time. The fund now has four portfolio investments.
Annabelle Ju contributed to this report.