Giving its new generation of leadership a deep capital pool to invest from, Norwest Venture Partners is expected to announce the close of a new $1.2 billion fund.
The announcement of Norwest Venture Partners XII LP comes on the heels of a record year for the firm in 2013, when it saw the liquidation of 11 of its portfolio companies create roughly $10 billion in value.
It also caps a remarkable run of infrastructure building within the 53-year-old firm. Since it raised the $1.2 billion Norwest Venture Partners XI fund, which closed in 2010, the company made its 50th partner appointment; announced the launch of its healthcare practice; added 40 new professional services staff members and promoted 11 investment or portfolio services executives to partner or general partner.
Chief among those new appointments was the elevation of Jeff Crowe and Matthew Howard to
the positions of managing partner at the firm, according to senior managing partner Promod Haque. “That’s the succession and the grooming plan,” Haque says of the process he’s been engaged with for the last 15 months. “We’re going to continue to empower them so that one day they can run the firm without me being there.”
Palo Alto, Calif.-based Norwest Venture Partners has offices in India and Israel in addition to its California locale and diversifies its investments by stage, technology, and geography.
From its single pool of capital the firm will invest in everything from early stage seed and Series A deals later stage growth capital investments. According to Haque later stage investments may be an area where Norwest Venture Partners would look to spend more time. “There’s a very interesting opportunity in the growth equity market,” he says. “Someone looking for a $25 million to $50 million round? Well that’s too small for the [TA Associates] or [Summit Partners]. If anything you’ve seen people like ourselves addressing that market.”
The new fund brings the firm’s total assets under management to $5 billion, and its limited partners are looking for Norwest to repeat its successes in deals like the security company FireEye, or the discount retailer, RetailMeNot, which both held lucrative public offerings within the past year. Other liquidity events last year included the $525 million NTT acquisition of the cloud-based networking services company Virtela; Experian’s $324 million deal to buy 41st Parameter’s fraud detection software; as well as the sale of the hardware company Passif — a low-power wireless semiconductor manufacturer.
As for particular sectors, Norwest’s current portfolio spans consumer services like Spotify, Lending Club, and Gilt Groupe; enterprise businesses like Adaptive Insights, Apigee, and BlueJeans Network; and in healthcare, CareCloud, Health Catalyst and others.
And whether there’s tech bubble or there isn’t a tech bubble matters very little to a firm like Norwest.
“We’ve had such a long track record,” says Haque. “We’ve never lost any money and we have consistent returns… Our longevity has been much longer than any investment cycles. We’ve seen these multiple cycles come and go.”