Morgenthaler shifts strategy with $400m venture fund

The firm has closed a venture only fund after having a hybrid private equity and venture model in place since 1991.

Morgenthaler Ventures has closed its ninth fund on slightly more than $400 million for venture investing, a shift from its hybrid private equity and venture capital strategy.

The fund will invest in information technology and life sciences companies. Since 2001, more than two thirds of Morgenthaler’s venture investments have been in seed and Series A financing rounds. However, the latest fund will broaden its focus to include more Series B and Series C financings.

The Silicon Valley-based firm’s previous fund, it’s final hybrid, closed on $450 million in November 2005 with $315 million allocated to the venture team. The fund size was a significant drop from Morgenthaler’s $870 million seventh fund in anticipation of shifting away from the hybrid model that had been in place since 1991.

The firm declined to comment on the fundraising activities of its buyout team, based in Cleveland, Ohio and Boston. The venture team is headquartered in Silicon Valley with offices in Boulder, Colorado, Princeton, New Jersey and Boston.

The information technology team has brought on two California-based entrepreneurs-in-residence: Rebecca Lynn and Guido Appenzeller. Lynn was previously a vice president at online credit card company NextCard. Appenzeller was co-founder of Morgenthaler portfolio company Voltage Security, a provider of encryption software.

The life sciences team has added Doug Treco as an entrepreneur-in-residence in the Boston office. Treco was the co-founder of biopharmaceutical company Transkaryotic Therapies, acquired by Shire in 2005.

Morgenthaler was founded in 1968 and currently has $2.6 billion in assets under management.