Venture capital funding has been on a relatively steady decline over the last few years. However, much like salaries in the NBA and MLB, gigantic sums are being thrown around in single funds and deals that are keeping things on an even keel. With technology improving across the board in every industry from automotive to biotech, these kinds of investments are more than likely to continue, particularly considering a recent $800 million fund closed by Canaan Partners.
According to a blog post released by the company, the fund, dubbed the Canaan XI, is an early stage technology and healthcare fund that will focus on the core areas of those industries. The fund will be the largest to date for Canaan Partners by quite a bit, dwarfing the $600 million it raised in 2012 and still notably larger than its $675 million fund it closed in 2014.
The round was led by longtime supporters Limited Partners and HarbourVest Partners, who have been more than impressed with Canaan Partners return on investment in recent years. Between the sale of gaming company Kabam to South Korea-based Netmarble Games and LendingClub going public, the firm has proven it can back the right horse when they need to.
“We have partnered closely with passionate entrepreneurs over the years and know the road to building a company is a roller coaster ride — particularly in early stage,” read the blog post. “We wouldn’t have it any other way.”
While the big names are important, the key to success for this firm is the smaller exits that keep the lights on. With 30 exits in the last 3 years alone and multiple funds at the upper decile, Canaan Partners should be closing a billion dollar fund before you know.
The fund is probably a must-appreciated birthday present, as the firm will be celebrating it's 30th anniversary this fall. Canaan Partners, as the blog writes, was the brain child of Jack Welch, the former chairman and CEO of General Electric, as the first iteration of General Electric Capital. Since then, they have enjoyed 30 years of exits, sales, and returns on investments that would make any respectable entrepreneur's jaw drop.
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