Industry Ventures – a leading investment firm focused on private technology investments – recently announced the final closing of Industry Ventures Secondary X with over $1.45 billion of new commitments. The firm also closed Industry Ventures Tech Buyout II with over $260 million of new capital commitments across the Fund and affiliated entities.
Consistent with the strategy of previous funds, Secondary X will seek minority investments in leading later-stage venture-backed companies through flexible investment structures, including direct secondaries, secondary LP investments, continuation funds, and other special situations. Tech Buyout II is a hybrid fund focusing on small software company buyouts and emerging software buyout funds. The closing of Secondary X and Tech Buyout II comes during a burgeoning market demand for investor liquidity. These two new funds bring the firm’s total committed capital under management to over $7 billion.
Secondary X is Industry Ventures’ largest fund raised so far and will enable the firm to continue to provide a broad range of liquidity solutions for venture capital investors. Industry Ventures has completed over 600 secondary investments in its 20-year history. These investments include over 400 secondary venture capital fund limited partnership interests and 170 direct secondary company share purchases, enabling exposure to over 5,500 venture capital-funded companies. Some of the most significant exits for the secondary strategy result from investments in Uber, Alibaba, ZipRecruiter, Nubank, LifeLock, Marqeta, Roblox, Trustwave, Twitter, and Upwork.
Tech Buyout II is Industry Ventures’ second buyout vintage, representing a doubling of commitments relative to the previous fund. The Tech Buyout Fund invests directly and indirectly in private equity buyouts of venture-backed software companies and special situations. It invests a minority of its capital in leading small-cap technology buyout managers through primary and secondary LP commitments.
Since starting the strategy five years ago, Industry Ventures has invested in 14 direct software buyouts and over 14 emerging buyout funds. These investments enabled the funds to gain exposure to over 75 software companies, majority controlled by their investors. Tech Buyout Fund I has already had four exits from the portfolio, including LINQ, AutoQuotes, Liquid Frameworks, and Cloud 9 Software. Each of these software companies was sponsor-to-sponsor exits or to strategics that were sponsor-backed.
The Funds’ investor bases include leading institutions representing public and corporate pension funds, endowments, charitable foundations, financial institutions, health delivery networks, family offices, and sizable commitments from the general partners.
KEY QUOTES:
“We’re especially grateful for the strong support both Funds received from existing and new limited partners alike given the difficult fund-raising environment that we are in. Overall, the venture market needs more liquidity, and our investment team is hard at work helping shareholders and limited partners generate cash from their investments.”
- Hans Swildens, CEO and Founder of Industry Ventures
“The closing of our tenth secondary fund is a tremendous achievement and milestone for Industry Ventures. Over our 20-year history we have invested across multiple market cycles, and this new fund enables our team to continue to identify and gain exposure to attractive secondary opportunities for our investors.”
- Justin Burden, head of the Secondary team
“The Tech Buyout Fund is a logical extension of our investment platform and a value-add to both our venture capital fund managers and company management teams. The current lack of liquidity in the venture ecosystem is generating notable buyout demand. We are excited to continue leveraging our unique position in the market to generate proprietary deal flow, access leading technology-focused buyout opportunities, and deepen our collaboration with our small fund managers.”
- Lindsay Sharma, head of the Tech Buyout team
