Boston-based VC firm Spark Capital is announcing its fourth fund this evening, raising $450 million for the firm’s biggest investment fund to date. Spark, who raised $360 million for its last fund, now has $1.4 billion under management. Partner Bijan Sabet tells us this fund was oversubscribed.
Founded in 2005 by Todd Dagres, Santo Politi and Paul Conway, Spark Capital invests across a broad group of areas in technology, including advertising and monetization, commerce and services, cloud and infrastructure, social, mobile and content. The portfolio includes Twitter, Tumblr, Foursquare, and OMGPOP (sold to Zynga). Most of the firm’s investments are early stage, but the range varies from $250,000 in seed funding or $25,000,000 in late-stage financing.
In 2005, Spark raised $260 million initially, and then for its second fund, raised $360 million in 2008.
Why the bigger fund this time around? Sabet explains that a larger fund gives the firm more flexibility in not only investing at the early stage but also putting in money at later stages, if necessary. “We like supporting companies throughout their life,” he says. “We want to support our companies properly.”
Sabet adds that the firm is spending more time with and investing in more companies in New York and San Francisco, and additional money gives the firm the flexibility for additional investments in new startups. He adds that 75 percent of the firm’s investments are for early-stage rounds.
Internally, Spark will be hiring at the associate level. A year ago, the firm brought on Nabeel Hyatt as partner. Hyatt was a general manager at Zynga who sold his company Conduit Labs to the social gaming giant.
Sabet says that the focus areas for the firm will remain the same for the fourth fund, but additionally Spark will be interested in investments in education, healthcare and financial services where these sectors intersect with social. Already, Spark has backed learning community Skillshare and fitness app Runkeeper.
More money for the startup ecosystem, at all levels, is always a good thing. Last year, VC firms raised more money for funds since 2008. Already this year, we saw that Battery Ventures just raised $900 million, and Redpoint recently raised $400 million for its fifth fund.