Bessemer Venture Partners, a century-old investment firm in Larchmont, New York, is aiming to raise as much as $1.5 billion for a fund to back technology startups, said two people familiar with knowledge of the deal.
Bessemer wants to raise $1.2 billion at the low end and will make investments from its U.S., India and Israel offices, according to the people, who declined to be named because the fundraising isn’t public. Bessemer completed its last fund in 2007 and then added to it two years later, raising a total of about $1.35 billion.
The biggest venture capital firms are emerging from a four-year fundraising slump and attracting billions of dollars from investors, enticed by a pickup in initial public offerings. Bessemer owns a 5.1 percent stake in LinkedIn Corp., the business-networking site that filed for an IPO in January. Sequoia Capital and Greylock Partners, two other investors in LinkedIn, also have raised capital.
Calls placed to Bessemer’s headquarters weren’t returned.
Bessemer is an investor in Tripwire Inc., a provider of Web-based security for corporations, which filed to go public in May, and Cornerstone OnDemand Inc., a software maker that plans to raise about $100 million in an IPO. Bessemer also was an early investor in Web-phone service Skype Technologies SA, which was bought by EBay Inc. for $2.6 billion in 2005. Skype is now an independent company again after a spinoff.
Henry Phipps started Bessemer Securities in 1911, after selling Carnegie Steel, the company that he co-founded earlier with Andrew Carnegie. The startup-investment unit was spun out of the securities firm and named Bessemer Venture Partners. It now has 17 investing partners, according to its website. In addition to operating in Larchmont, it has offices in Menlo Park, California; Cambridge, Massachusetts; Herzliya, Israel; and Mumbai, India.
Bessemer invests in companies focused on alternative energy, Internet services, data security, finance, health care and e-commerce. It was an early backer of retailer Staples Inc., computer-networking company Ciena Corp., and VeriSign Inc., which helps maintain the Internet’s infrastructure. Bessemer says it has more than $2 billion invested in over 130 companies.
Venture-capital fundraising declined in 2010 for the fourth straight year, dropping 25 percent to $12.3 billion, according to the National Venture Capital Association. The amount has tumbled by more than half since 2005 as a dearth of IPOs hurt returns at venture firms. Institutional Venture Partners, Battery Ventures and Oak Investment Partners raised the most money in 2010, each attracting $750 million.