US venture firm Venrock, founded by the grandson of Standard Oil tycoon John Davison Rockefeller, has closed its latest fund on $350 million.
Venrock VI will focus on early stage technology, healthcare and energy companies. It will also “support companies that bridge these sectors, such as healthcare IT, biofuels, and energy systems and software”, partner Bryan Roberts said in a statement.
The fund is employing the same strategy as its predecessor, which closed on $600 million in May 2007. Fund VI was in market for four months, and did not use a placement agent.
The firm reportedly turned down a number of willing investors for the fund, and closed on time. “It is a testament to the firm’s efforts and success that the fund was oversubscribed, particularly when so many others are struggling to raise capital, said Geoff Love, head of venture capital investments at The Wellcome Trust, one of the fund’s limited partners. Venrock VI also recently received a $25 million commitment from the Tennessee Consolidated Retirement System (TCRS).
Speaking with PEI, Roberts said the fund ended up being significantly smaller than Fund V due to the investment team’s “bottoms up” approach that focused on attractive sectors and investing partners first, rather than a target fund size. Roberts also acknowledged the recent trend of smaller funds being raised by technology investors. “Certainly in technology, you’re seeing deals become more capital efficient,” he said. “Building an internet company is a lot more capital efficient than it used to be, so sometimes the same [kind of] companies just take less dollars.”
In addition to the decrease in the fund’s size, the total number of investors at Venrock has fallen to 8 from 15, which managing director Ray Rothrock attributed to “natural attrition and retirement”.
Venrock was an early investor in technology sectors, backing Intel, Apple Computer and DoubleClick, as well as biotechnology companies such as Genetics Institute, Centocor and Idec Pharmaceuticals among others.
Venrock was established in the 1930s by Laurance Rockefeller, who pioneered early-stage financing by investing in Eastern Airlines and McDonnell Aircraft. In 1969, Venrock was more formally founded as a venture capitalist firm. It now has offices in Palo Alto, New York, Boston and Israel, and manages funds of more than $2.2 billion.