Norwest Venture Partners, a 65-year-old firm backed exclusively by Wells Fargo, has raised $3 billion for its 17th fund.
This number is notable considering the last time NVP raised a similar amount was in December 2021. It was the peak of the venture boom, and at the time the company announced it had increased its capital pool by 50% (NVP's 2019 fund closed at $2 billion) in a deal that increased round sizes and valuations to unprecedented levels. Because we needed to stay competitive in our environment.
However, things have clearly changed since then. Investors are backing fewer companies, and valuations are falling and could fall further.
Senior Managing Partner Jeff Crowe acknowledged that the pace of investment in ventures and certain sectors has slowed compared to a few years ago, but he believes that certain strategies such as growth stocks, healthcare, India, He said trading in the sector and region is difficult. It was as strong as it was before the recession.
“We've maintained a very steady pace and delivered a number of great exits,” Crowe told TechCrunch. “We felt it made sense to keep going at the same pace.”
Since closing its previous fund, the firm has helped 36 companies achieve liquidity. Crowe said that while not all exits turned out great for the company (NVP portfolio company VanMoof filed for bankruptcy protection), the gains from certain exits far outweighed the losses. He pointed to the company's sale of Spiff to Salesforce, EQT's acquisition of Avetta for a reported $3 billion, and the IPO of India-based Five Star Business Finance.
Mr. Crowe declined to comment on returns, but said, “This is Fund No. 17. We've been doing this for a long time. In the venture world, if you make really good returns, you stay in business.'' Ta.
NVP attributes much of its success to being managed by one large global multi-strategy fund. The company has investments in North America, India and Israel. The company operates early-stage and growth equity businesses and recently added a biotechnology team to strengthen its existing healthcare operations.
A multi-pronged approach allows companies to adjust their strategies as the market changes. For example, NVP had planned to invest in crypto companies during its last funding round, but the space fell out of favor soon after and the company did not pursue many deals in this space.
“Our diversification strategy works well through the ups and downs of the investment cycle,” Crowe said. “It gives us flexibility. That's the beauty. We respond more quickly to change.”