Kleiner Perkins Closes Two New Funds Worth $1.8 Billion, Promotes Pair Of Partners
Kleiner Perkins is the latest Silicon Valley firm to raise new funds, but the storied Sand Hill Road firm says it’s standard procedure to keep true to its blueprint.
Entering its fiftieth year in 2022, the firm announced Tuesday that it had raised $800 million for the twentieth iteration of its early stage venture fund, plus $1 billion for its second early growth stage vehicle. It is also promoting principals Annie Case and Josh Coyne to the rank of partner.
The new venture fund comes after Kleiner Perkins finished deploying $700 million from its last fund, which was announced in March 2020. Partner Mamoon Hamid says the firm will continue its normal cadence of investing in 35 companies across a roughly two-year period per fund. “As valuations have gone up a little bit and check sizes have gone up a little bit, our fund sizes have gone up a little bit,” he says. “Maybe we’ll write slightly bigger checks to own the same amount of a company, but fundamentally that part of our business remains the same.”
Meanwhile, the firm’s growth “Select” stage fund comes just nine months after Kleiner Perkins launched the first of its breed in the form of a $750 million fund. Last year’s announcement was the first time the firm had formally returned to growth stage investing since its longtime growth leader Mary Meeker left to start her own firm, Bond, in 2019. In a press release at the time, the company said the growth arm would feature “the same team, with the same strategy, investing in the same sectors” as its early stage fund. Hamid tells Forbes that moving forward, he expects the fund to invest in 12 to 15 companies per fund.
Kleiner Perkins will continue to invest broadly across five technology categories: enterprise tech, consumer tech, deep tech, healthcare and fintech. Case and Coyne are the latest additions to a team of six partners who call the shots at the firm, joining Hamid, Ilya Fushman, Wen Hsieh and Bucky Moore. Longtime partner Ted Schlein remains at the firm, but is no longer an active investor; in December, he launched Ballistic Ventures, a separate entity to invest exclusively in cybersecurity. Case, the daughter of former AOL chief Steve Case, becomes the only female investment partner at Kleiner Perkins.
The pair of new partners will continue to focus on the specific verticals in which they’ve become experts, Hamid says. For Case, who joined the firm in 2018, that’s digital health and consumer marketplaces, while Coyne, who joined in 2017, will focus on logistics and business process software that help antiquated industries. In addition, Kleiner Perkins has traditionally lumped cryptocurrency investments into the fintech sector, but the firm is beginning to think of it as its own category, Hamid says, adding that his team is particularly bullish on currency exchanges and collectible NFTs.
Still, on crypto and other strategies, the firm is not making radical changes to its playbook, as some of its peers have done. Andreessen Horowitz launched a stand-alone crypto fund last year and announced $9 billion in new capital last week, including a $2.5 billion venture fund that was $1.2 billion larger than the fund before it. Sequoia last year restructured its setup into a single fund that removed the traditional venture capital stipulation of returning dollars to the fund’s limited partners at the end of a ten-year cycle. For Kleiner Perkins, however, Hamid maintains that now is not the time for such dramatic reinvention.
“This is a playbook that’s worked for us for almost 50 years. So I think we stick to that playbook, given the results, returns and impact,” Hamid says, pointing to the more than 1,000 companies the firm has backed in its lifetime. “If we can continue to do what we’ve done over the last 50 years over the next 50 years, I think we’ll feel really good about the work we’re doing.”