One of Silicon Valley’s long-standing venture capital companies, Kleiner Perkins, is celebrating its 50th year in business and raising $1.8 billion for two new funds — KP20 and Select2 — to start the year in style.
In addition to KP20, which is an $800 million venture fund that focuses on early-stage investments in enterprise and consumer companies as well as hard tech, fintech, and healthcare companies, Select2 is a $1 billion fund — the most significant amount of money the firm has ever raised at once — that expands the firm’s core investment strategy to include high-inflection investments across those same five areas.
Select2 is the follow-up to the $750 million Kleiner Perkins Select fund, which the company disclosed in April.
As Partner Ilya Fushman explained to TechCrunch, the firm’s focus has remained the same since the firm’s founding in 1972: “Venture capital is a non-scalable, boutique craft that necessitates extremely dedicated practitioners with diverse and complementary backgrounds that span technology, operating, and investing.”
In addition to having a track record of being early investors in technology darlings such as Google, Netscape, and Genentech, Fushman said the investor team he has assembled over the past four years is now taking over the next generation of the firm, while the new funds will be able to back the next generation of iconic companies.
In addition to the money, Kleiner Perkins elevated other team members to the position of new partners, including Annie Case, a specialist in consumer markets and digital health, and Josh Coyne, who is in charge of investments in business software.
Case told TechCrunch that she is seeing more investment in mental and behavioral health, as well as alternative medicines, in the digital health space, while on the consumer side, she is seeing a lot happening in education technology, primarily as a result of school districts and parents adjusting to the experience of teaching during the global pandemic. Additionally, the business is devoting more effort to investigating potential in the cryptocurrency and web3 industries.
In terms of financing $1.8 billion in a single transaction, Fushman believes Kleiner Perkins is responding to the current environment. Firms are growing larger and quicker and expanding across industries, technologies, and geographical borders. This is evident in the increased value of exits, the increase in the number of firms launched each year, and the opportunity size.
The company’s ability to invest more fund cash into later rounds, or with a more extensive check to get in, while maintaining the same level of venture help for which Kleiner Perkins is renowned in the early stages, is another advantage of having more fund capital at its disposal.
“The overall state of the venture capital industry makes this an exciting opportunity to go beyond early-stage investments and give a broad spectrum of funding,” Fushman added. “As we assist firms in developing, if we see that they are at a turning point or if we missed out on a Series A round, we could do something with the Select fund.”