USVP Raises $625M


U.S. Venture Partners has closed $625 million for its 10th fund as it continues to pursue an aggressive investment pace.

The firm’s latest fund, USVP X, is slightly larger than the $600 million vehicle it raised in 2004, but smaller than the $1 billion it raised during the dot-com boom. The firm has done 37 deals to date this year, putting more than $76 million to work, according to data from Thomson Reuters (publisher of PEHub.com).

USVP General Partner Irwin Federman did not return a request for comment about the firm’s new fund.

The close of fund X comes as USVP has had a string of successful portfolio company exits over the past year. It sold kidney disease drug company Ilypsa to Amgen for $420 million in June, 2007; digital security company Vontu for $350 million to Symantec in September 2007; and online advertising company Adify to Cox Enterprises for $300 million in April 2008.

The early stage venture firm has also had a few of its portfolio companies launch IPOs. Anti-stroke company AtriCure went public in August 2005 at $12 per share. It closed just above $10 in trading last week. Protein therapeutics company Altus Pharmaceuticals, which USVP took public in January 2006 at $15 per share, was trading under $5 per share last week. Still, poor-post IPO performance is not abnormal for pharmaceutical companies, especially in a bear market.

Perhaps the most notable recent flameout in the USVP portfolio was PodTech, a digital content creation company, which sold for less than $500,000 after raising $7.5 million from USVP and Venrock Associates in 2005.

As many VC firms have pursued investments overseas, USVP has stayed close to home. Of the 25 companies USVP has backed from its ninth fund, 24 are based in California, according to data from Thomson Reuters. Insider Guides Inc., a startup that describes itself as a social networking company, is based in New Hope, Penn.

Menlo Park, Calif.-based USVP has also maintained a focus on communications, semiconductor and software investments, putting more than 65% of its last fund into those industries, according Thomson Reuters. Another 20% of fund IX went to health care companies. The firm has not embraced recently popular sectors such as clean technology.

USVP lost one of its co-founders earlier this year. Stuart Moldaw, a general partner at the firm from 1980 to 1990, passed away in May after a brief illness. He was 81. Moldaw had helped form retail companies Ross Stores, Gymboree, Home Express, Pic-A-Dilly and Athletic Shoe Factory.