Meritech Capital Partners said Wednesday that it has closed its latest fund at $425 million. Meritech Capital Partners IV will target four sectors: Internet and Digital Media, Communications and Wireless, Enterprise IT and Medical Devices. Meritech’s last fund, MCP III, raised $400 million. Palo Alto, Calif.-based Meritech is a late-stage VC firm.
Meritech Capital Partners (MCP), a leading late-stage venture capital firm, announced the closing of Meritech Capital Partners IV, a $425 million late-stage venture capital fund. The fund will continue MCP’s successful strategy of investing in rapidly-growing technology companies primarily in the United States. This fund brings the firm’s cumulative capital under management to $2.6 billion and is a successor to MCP III, a $400 million fund which commenced investing in 2006.
“Our later-stage investment practice is working well,” said Paul Madera, Managing Director at Meritech. “We are particularly grateful to our management teams who are growing great companies, and we appreciate the on-going support of our Limited Partners. The exceptional investor demand for this fund is a tribute to our portfolio companies and our investment results.”
“Our partnership is stronger than ever, and we continue to invest behind the world’s leading entrepreneurs,” added Rob Ward, Managing Director at Meritech. “We have been fortunate to back proven winners like Josh Makower and Bill Facteau at Acclarent, Ken and Michael Xie at Fortinet, Jerry Kennelly and Steve McCanne at Riverbed and many others. This new fund is a tribute to their hard work and success.”
With MCP IV, the firm will primarily target four sectors: Internet and Digital Media, Communications and Wireless, Enterprise IT and Medical Devices. Typical investments will range in size from $10 million to $20 million. “We see no shortage of investment opportunities given the innovation that is taking place in mobile, virtualization, cloud computing, the social-enabled Internet and data management and analytics. If anything, there are a record number of attractive late-stage companies today.” said George Bischof, Managing Director at Meritech.
“Our deal flow is the strongest it’s ever been. We have recently invested in category leading companies such as Box.Net, Cloudera, Cyan, Tableau and Wonga” said Mike Gordon, Managing Director at MCP. “We provide the insight, capital and the contacts necessary to accelerate and manage growth.”
Meritech currently has four Managing Directors, George Bischof, Mike Gordon, Paul Madera and Rob Ward and the partnership team has more than 60 years of late-stage investing experience. The partners have made venture capital investments in many of the most successful venture backed technology companies of the past decade including Cornerstone OnDemand, Facebook, Fortinet, Intralase, Netezza, Netsuite, Riverbed and Salesforce.com.
Meritech has been one of the most prolific producers of returns to LPs in recent years with 16 liquidity events in the past 18 months; 13 of them valued at $400 million or greater. Recent MCP
liquidity events include the initial public offerings of 21Vianet (VNET), Broadsoft (BSFT), Calix (CALX), Cornerstone OnDemand (CSOD), Fortinet (FTNT), Netsuite (N), and Zipcar (ZIP) and several highly successful M&A transactions; Pace Technology acquired 2Wire for $475 million, Harmonic acquired Omneon for $310 million, Johnson & Johnson acquired Acclarent for $820 million, IBM acquired Netezza for $1.7 billion, and Microsoft acquired Danger for $500 million.
Limited Partner demand for MCP IV was exceptionally strong, and the fund was oversubscribed. Limited Partners in MCP IV came from around the globe and include foundations, university endowments, public pension funds, private equity fund-of-funds and sovereign wealth funds.
About Meritech Capital Partners (MCP)
Meritech Capital Partners is a leading provider of late-stage venture capital to category-defining private technology companies, and has been one of the top performing venture firms of the past decade. With over $2.6 billion under management, Meritech primarily leads investments into portfolio companies of leading early-stage venture capital firms and looks for companies with proven and differentiated technology, rapidly-growing revenue and experienced management teams. With one of the most active venture portfolios, Meritech has experience in, and provides guidance on issues facing rapidly growing companies including management incentive plans, IPO market timing and positioning, M&A strategies and negotiations and adviser selection.
Meritech investments in industry-leading companies include 2Wire, Acclarent, BigFix, Broadsoft, Cornerstone-OnDemand, Danger, Facebook, Fortinet, Greenplum, Netezza, NetSuite, PopCap, Presidio, Riverbed, Salesforce.com, Sourcefire, SpringSource, Tele Atlas and Zipcar.
Meritech is located in Palo Alto, CA and can be found at www.meritechcapital.com.