Norwest Venture Partners establishes new fund with plans to invest in Israeli startups

nvpIn what is widely considered to be a difficult fund-raising environment, Norwest Venture Partners has raised a $1.2 billion fund, NVP XI, following on from the $650 million NVP X Fund which it raised in 2006. Managing Partner, Promod Haque, indicated that he sees this larger fund positions the firm to diversify along three axes:

1)     Geography – increasing deal flow in China, India and Israel;

2)     Sector – extending focus into healthcare information and medical systems; and

3)     Stage – increasing focus on growth equity (later stage) investments in mature companies.

NVP has two investment professionals based in the firm’s Herzelia office, and in the past the firm has invested in a number of Israeli companies including Double Fusion and Unisfair.

This new fund is interesting due to its size and its focus on later stage investments. Amidst much discussion about how the traditional VC model is broken, it seems as if some funds are scaling up, becoming increasingly reliant on financial innovation to secure attractive returns for their investors within a short timeframe (NVP has invested in a power company in India, for example). In contrast, others are keeping small to focus on investments in early stage startups that do not require a lot of capital (Union Square Partners manages two funds with a total of $281 under management and is focused on investing in early stage, capital-efficient startups).

That said, there are exceptions, like the newly established Andreessen-Horowitz. The firm has $300 million under management which it invests in very early stage Internet companies as well as more mature businesses. The firm was part of the syndicate which purchased Skype from eBay, contributing $50 million to get the deal done.

gmugliston

Geoffrey Mugliston (mer-gliss-ton) is a London-based Australia-born entrepreneur, strategist and blogger. He began writing for VC Cafe in 2009 with the objective of showcasing promising Israeli startups to the global startup and investment community. He is co-founder of a consumer internet company with its development team based in Haifa (currently in stealth-mode). He also serves as adviser to a pan-European startup which develops software for print service providers. Prior to his current projects, Geoffrey worked in management consulting with a focus on the infrastructure sectors. When not working (though sometimes while working) he enjoys coffee, running and engaging in intense debate. He holds an undergraduate degree in finance from the University of Sydney.

gmugliston

Geoffrey Mugliston (mer-gliss-ton) is a London-based Australia-born entrepreneur, strategist and blogger. He began writing for VC Cafe in 2009 with the objective of showcasing promising Israeli startups to the global startup and investment community. He is co-founder of a consumer internet company with its development team based in Haifa (currently in stealth-mode). He also serves as adviser to a pan-European startup which develops software for print service providers. Prior to his current projects, Geoffrey worked in management consulting with a focus on the infrastructure sectors. When not working (though sometimes while working) he enjoys coffee, running and engaging in intense debate. He holds an undergraduate degree in finance from the University of Sydney.