Norwest Venture Partners, a 65-year-old company backed solely by Wells Fargo, has raised its 17th fund worth $3 billion.
That's a noteworthy figure, given that NVP last raised the same amount in December 2021. That was the peak of the venture boom, and at the time, the company said it had increased its capital fund by 50%. (NVP's 2019 fund closed at $2 billion) because it needed to remain competitive in the deal environment where round sizes and valuations have risen to unprecedented levels.
But things have clearly changed since then. Investors are backing fewer companies and valuations have fallen and may fall more.
Jeff Crowe, senior managing partner, admitted that the rate of investment in venture firms and in certain sectors is slower than several years ago, but said that trading in certain strategies, sectors and geographies, such as growth capital, focus medical and India, is as strong as it was before the crisis.
“We've maintained a very consistent pace and have had a number of good starts,” Crowe told TechCrunch. “We feel it makes sense to continue at the same pace.”
Since closing its previous fund, the firm has helped 36 companies obtain liquidity. Not all exits were good results for the company (NVP's portfolio company VanMoof filed for bankruptcy), but, according to Crowe, the benefits of certain exits far outweighed the losses. He noted the company's sale of Spiff to Salesforce, the purchase of Avetta by EQT for $3 billion, and the initial public offering of India-based Five Star Business Finance.
Crowe declined to comment on returns, but said, “This is fund 17. We've been doing this for a long time, and in the venture world, you can stay in business if you make really good returns.”
NVP attributes much of its success to operating from a large global multi-strategy fund. The firm invests in North America, India and Israel. It has an early and growth stage equity business, and recently added a biotechnology team to round out its existing healthcare practice.
The diversified approach allows the company to adjust its strategy when the market changes. For example, NVP planned to invest in cryptocurrency companies when it raised its last fund, but the sector fell out of favor soon after and the company did not pursue many deals in this space.
“Our diversified strategy works well through the ups and downs of investment cycles,” Crowe said. “It gives us flexibility. That's the beauty of it. We react faster to changes.”
