Accel-KKR Targets $700 Mln for New Fund

Accel-KKR has begun raising its next fund, expected to reach $700 million, according to a placement source and an SEC filing.

The PE firm, which invests in mid-market tech companies, is not believed to be using a placement agent for Accel-KKR Capital Partners IV LP, our source says.

Accel-KKR’s previous fund raised $600 million in 2008, above its $450 million target. “Performance on the last fund is O.K. for a vintage 2008 fund,” our source says. “That fund was raised very quickly.”

In some ways Accel-KKR was lucky with Fund III, the source says. The pool closed in September 2008, right before the record-breaking bankruptcy of Lehman Brothers and the worst of the bear market.

News of Accel-KKR’s fundraising was reported earlier by Term Sheet.

Accel-KKR, which has offices in Menlo Park, Calif. and Atlanta, typically invests in companies generating $10 million to $200 million in revenue. In November, Accel-KKR sold Endurance International Group, a provider of hosting and online services, to Warburg Pincus and GS Capital Partners. The deal was reportedly valued at $1 billion. Accel-KKR retained a stake in the company.

Accel-KKR in September invested in Infinisource, a benefits administration technology company. Also that month the PE firm invested in Paymentus Corp., an electronic bill payment company.

Officials for Accel-KKR could not be reached for comment.