Today, Sierra Ventures, a San Mateo, Ca.-based early stage technology venture capital firm, is announcing that it has closed its 11th fund with $170 million.
It’s an impressive amount, given that Sierra’s future was somewhat cloudy several years ago. Although the now 33-year-old firm closed its ninth fund with $400 million in 2006, like many other mid-size venture firms, it soon found the landscape around it had shifted as the cost of starting a company began to plummet. Sierra was able to raise a tenth fund, but it took until 2012, and it closed with $145 million — as well as three fewer investors on its roster.
The remaining three managing directors – Ben Yu, Mark Fernandes, and Tim Guleri – certainly appear to be doing something right. Already, Sierra’s tenth fund has seen five exits that have collected produced cash on cash of three times the firm’s investment, says Yu.
Terms weren’t disclosed for every deal, but the handful of its portfolio companies includes Bina Technologies, acquired by Roche for undisclosed terms; Nexgate, acquired by Proofpoint for $35 million; Tempo, acquired by Salesforce for undisclosed terms; and both Social Touch and Ximalaya, young companies that have been quietly acquired for undisclosed amounts.
Yu, who called us yesterday from CES, says he thinks the firm’s newest fund is even better positioned, both because of the momentum behind it and because it’s a little easier for everyone to find “value” with early-stage valuations falling slightly.
Indeed, Sierra — which writes initial checks of between $1 million and $5 million and is willing to plug up to $15 million in its breakaway portfolio companies – looks to secure 20 percent of a startup in return for its investment.
That hasn’t always been easy in the go-go market of recent years. Now, says Yu, “I’m very optimistic about the current environment.”
As for whether Yu has seen anything particularly compelling at CES — Sierra invests in both enterprise and consumer tech startups – he says he has seen plenty.
“I’m a real sucker for robotic technology and think this is becoming the right time for it,” he told us, the din from the popular trade show in the background. “Artificial intelligence is becoming very pervasive both in consumer life and in the business world, where we’re seeing more companies use vision computing combined with AI.”
Yet the “neatest gadget” Yu says he has seen thus far at CES are “all the self-driving cars. They’re fascinating. I think the technology that goes into them will be showing up in everyday life as well.”