SAP Ventures Raises $650 Million Fund as IPOs Increase

SAP Ventures, the startup-investing unit of German software maker SAP AG (SAP), raised more than $650 million for its latest fund, bringing the total amount it manages to $1.4 billion.

SAP Ventures Fund II is almost $300 million bigger than the previous one, which was established in 2011, the Palo Alto, California-based unit said in a statement today. The group is also establishing a business-development team of 10 people to seek out deals across the U.S., Europe and Asia.

As business-focused startups gain bigger valuations on the private and public markets, venture firms are raising more money to invest in companies focused on cloud computing, mobile software and technology that boosts data-center speed. The emerging companies are aiming to displace some of the biggest technology vendors, including SAP, said Nino Marakovic, chief executive officer of SAP Ventures.

“We’re now seeing the creation of the next set of $10 billion, $20 billion, $50 billion companies,” Marakovic said in an interview. “We’ll be investing all the time in companies that step on SAP’s toes.”

SAP, the largest maker of business-management software, spun off SAP Ventures as an independent entity in 2011. The company has committed $1 billion to back startups and $400 million more to invest in other funds. About 50 percent to 60 percent of startups backed by SAP Ventures end up with some relationship to SAP, whether as a supplier, sales partner or through an acquisition, Marakovic said.

Among the companies that the venture group has invested in, 12 have been purchased or gone public this year, Marakovic said. The initial public offerings include Violin Memory Inc. (VMEM), Tremor Video Inc. (TRMR) and Marin Software Inc. (MRIN)

To contact the reporter on this story: Ari Levy in San Francisco at alevy5@bloomberg.net

To contact the editor responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net

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