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TCV to begin investing $2.5 bln Fund IX soon

  • TCV IX, at $2.5 bln, ranks as one of the largest in venture investing history: WSJ
  • TCV VIII closed at $2.23 billion in 2014
  • TCV exits in 2016 include LinkedIn, Dollar Shave Club, Genesys, Sitecore and TechTarget

Technology Crossover Ventures, known for investing in Netflix and LinkedIn, raised $2.5 billion with its ninth flagship growth fund.

TCV IX surpassed its $2.2 billion target by 14 percent to close at its $2.5 billion hard cap, said Nathan Sanders, a general partner and the firm’s investor-relations representative. The Palo Alto, California, firm will begin investing Fund IX “in the next couple of months,” he said

The firm’s previous fund, TCV VIII, collected $2.23 billion in 2014. “Two-and-a-half to three years [between funds] is a typical investment frame for us,” Sanders said.

Founded in 1995, TCV invests in public and private tech companies, focusing on Internet, services, infrastructure and software. TCV will occasionally invest in startups but looks “for companies with multiple years of revenue,” Sanders said.

The Wall Street Journal said TCV IX ranks as one of the 10 largest in venture investing history. Other large pools, the WSJ reports, include Insight Venture Partners$3.29 billion fund from last year and a $3.15 billion pool from New Enterprise Associates, which closed in 2015. TCV itself raised $3 billion with its seventh fund in 2007.

TCV general partners are “significant” co-investors in Fund IX, Sanders said, declining to specify numbers. The LPs include public and private pension funds, university endowments, family offices and tech entrepreneurs, Sanders said.

Thus far in 2016, the IPO market has been “somewhat” challenging but the exit market has been very good for TCV, he said.

Significant exits for TCV include the mammoth sale of LinkedIn, which Microsoft is buying for $26.2 billion. Unilever also said in July it would buy Dollar Shave Club for $1 billion. Hellman & Friedman agreed that month to invest $900 million in Genesys. EQT in April inked a deal to buy a majority stake in Sitecore for about 1 billion euros.

Sanders declined to disclose how well TCV did with LinkedIn or Dollar Shave Club.

TCV VIII, a young fund, produced a 7.72 net IRR and a 1.1x total value multiple as of Dec. 31, data from Washington State Investment Board shows. TCV’s seventh pool was generating an IRR since inception of 21.26 percent as of Sept. 30, California State Teachers’ Retirement System said.

Action Item: Contact TCV: ir@tcv.com

Photo courtesy ©iStock/Andrew Rich