Insight Venture Partners, an investor in Twitter Inc. and SolarWinds Inc., is aiming to raise as much as $1.5 billion for a new fund, according to two people familiar with the matter.
The venture capital firm, which has raised more than $3 billion since it opened in 1995, is soliciting investors for a seventh fund, said the people, who declined to be named because the fundraising isn’t public. Insight raised $1.25 billion for its most recent fund in 2007. Representatives of Insight didn’t return messages seeking comment.
Not since last year has a U.S. venture firm raised a fund of at least $1 billion. New Enterprise Associates and Norwest Venture Partners, completed funds of about $2.5 billion and $1.2 billion, respectively, in the fourth quarter of 2009. Fundraising has slowed this year after a two-year slump in initial public offerings that hurt returns at venture firms and led endowments and pensions to invest their capital elsewhere.
An Insight fund of $1.5 billion would be double the size of the biggest funds of the year. Institutional Venture Partners and Battery Ventures each completed $750 million funds. Andreessen Horowitz LLC said this month that it raised $650 million for its second fund.
Insight, based in New York, invests in software and Internet companies typically after they’ve gained traction in the market and are growing rapidly.
It was among a group of firms that invested a total of $100 million in social-networking site Twitter in September 2009, at a valuation of $1 billion. At the time, San Francisco-based Twitter had 25 million users, a number that has since surged more than sevenfold.
A year ago, Insight led a $57 million equity investment and $25 million debt financing in online book-rental company Chegg Inc. The firm was one of the biggest shareholders in Austin, Texas-based SolarWinds, when the maker of network-management software went public last year. Insight also owns 13 percent of Newegg Inc., the online retailer of consumer electronics, according to the company’s September 2009 IPO filing.
IPOs have picked up this year, with 40 venture-backed companies going public through the first three quarters, compared with 18 in 2008 and 2009 combined, according to the National Venture Capital Association. The total is down from 2007, when there were 86 venture-backed IPOs, and is a fraction of the 264 in 2000.
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