TriplePoint Raises $1 Billion Fund to Increase Lending to Venture Capital

TriplePoint Capital, the provider of debt financing to venture-capital-backed companies, said today it raised a $1 billion fund to expand its lending business even as traditional venture funding hit an eight-year low.

The firm, which has provided growth capital to companies including Facebook Inc., Google Inc. (GOOG)’s YouTube and Gilt Groupe Inc., will use the money to expand its business in the U.S. and abroad, Chief Executive Officer Jim Labe said.

The new fund more than triples to $1.4 billion the total amount TriplePoint has raised since it began in 2006, Labe said in an interview.

“With venture funding at a low overall, that’s also an opportunity for venture debt,” Labe said. “These venture-stage companies want to make sure that the firm they’re transacting the venture debt business with is going to perform, has the resources, is going to be around, and is healthy.”

Before the closing of TriplePoint’s new fund, the firm had raised $400 million that, along with leverage and lines of credit, allowed it to provide companies with almost $2 billion of financing, Labe said.

U.S. venture capital firms raised $1.72 billion in the third quarter, the lowest amount since the July-September period of 2003, according to the Arlington, Virginia-based National Venture Capital Association.

Fundraising Continues

Still, larger venture capital firms continue to raise new funds, and TriplePoint plans to increase its lending business alongside those firms’ investments, Labe said. Accel Partners raised two funds totaling $1.35 billion during the second quarter of this year, according to NVCA. In the first quarter, Bessemer Venture Partners raised $1.6 billion and Sequoia Capital raised $1.3 billion, NVCA said.

TriplePoint invests in information technology, clean technology and life-science companies and counts Bloom Energy Corp., Etsy Inc. and Chegg Inc. among its customers, Labe said. Early-stage companies often grant stock warrants to TriplePoint in return for loans, he said.

While most of TriplePoint’s capital goes toward loans or equipment leases for its customers, it uses about 10 percent of its funds to buy equity stakes in companies during rounds of traditional venture financing, Labe said.

Wafra Investment Advisory Group Inc., a financial asset manager in the U.S. that’s controlled by Kuwait’s government, invested in the recently closed fund, according to Labe. He declined to say how much Wafra invested or to name other investors because the information is private.

To contact the reporter on this story: Lee Spears in New York at lspears3@bloomberg.net

To contact the editor responsible for this story: Jennifer Sondag at jsondag@bloomberg.net