Institutional Venture Partners (IVP) announced today that it has closed its 16th fund, dubbed IVP XVI. At $1.5 billion, this is the firm’s largest fund since its founding in 1980. According to a statement, IVP’s existing Limited Partners (LPs) contributed the vast majority of the capital.
This is a gigantic fund when compared to the firm’s first, which, according to general partner Jules Maltz, closed at $22 million. The firm has seen tremendous growth over the years and reported a 36-year internal rate of return (IRR) of 43.2 percent. Its last fund, which was raised a little over two years ago, totaled $1.4 billion.
With IVP XVI, the firm plans to invest in 35 to 40 companies, in amounts ranging from $10 million to $100 million per company. Current portfolio companies include AppDynamics, Domo, Dropbox, Glossier, The Honest Company, Slack, Snap, Supercell, Twitter, and ZipRecruiter. The firm has already invested in more than 300 companies, of which 106 have gone public, according to a statement.
Maltz told VentureBeat that IVP XVI will target new later-stage companies in sectors that include Software as a Service (SaaS), security, consumer products, and cryptocurrency. IVP recently invested in digital currency exchange startup Coinbase.
When asked what he thinks of initial coin offerings (ICOs), Maltz replied, “Even though it’s fun to monitor, I’m cautious about the ICO space,” adding that companies choosing an ICO over an IPO are often those finding it hard to raise capital in the traditional way.
He points instead to other forms of fundraising, like crowdfunding platforms, and highlighted Indiegogo, which IVP invested in.
Even though IVP works with late-stage companies that have a global reach (think Snapchat and Twitter), the firm enjoys its proximity to Bay Area startups, with two local offices, one in San Francisco and one in Menlo Park. “The ability to move quickly is a huge strategic advantage for us,” said Maltz.
The firm invests between five and 10 percent of its funds in international companies, he added, one of the most notable being Finnish game developer Supercell, which created Clash of Clans.
When asked whether IVP wants its foreign portfolio companies to relocate to the Bay Area, Maltz responded, “No, we’re late-stage investors. Our number one rule is don’t mess anything up! We’re never prescriptive about where the company should be based or what product it should be launching.”
Other partners at IVP include Todd Chaffee, Somesh Dash, Norm Fogelsong, Steve Harrick, Eric Liaw, Sandy Miller, and Dennis Phelps. In addition, Tom Loverro and Roseanne Wincek were recently promoted to principals at the firm.
To date, IVP has raised a total of $7 billion across 16 funds.