KKR, the global investment firm, is announcing a $711 million close this morning on its KKR Next Generation Technology Growth Fund, which it plans to use to back growth-stage companies in the technology, media and telco industries in North America, Europe and Israel.
It’s a new product for the firm, though you might have seen its name crop up in a good many deals this past year; that’s because it began investing it nearly year ago.
Among the bets it has made are the big data analytics company Optimal+ ; the tour-booking platform GetYourGuide; the cloud integration software company Jitterbit; and the cyber defense company Darktrace.
Including those bets and others made outside the fund, KKR says it has invested more than $640 million in still-private, growth-stage investments since 2014. Some of those other investments include stakes in the anti-virus software company Cylance; in the fantasy sports business FanDuel; and in the augmented reality company Magic Leap.
What’s KKR’s criteria, exactly, when looking at these deals? According to new-hire David Welsh, who joined the firm in October from Adam Street Partners to head up the new fund, TMT Growth will be focused on “private companies that are beyond early-stage technology risk but are still scaling their market-expansion efforts and are experiencing high growth. They have technology and go-to-market models that are proven but have lacked the capital and backing of an established partner or sponsor who can help catapult their growth and development.”
So what you’d guess, basically.
As for the checks the fund will be writing, Welsh says these will tend to be less than $100 million and that his 12-person team will generally be targeting investments of $40 million to $50 million per company.
Perhaps worth noting: The new fund doesn’t have any strict revenue thresholds, according to Welsh. In fact, it might invest in companies that still have operating losses. But it does “want to see a clear path toward profitability and evidence of a model that improves as revenue continues to scale,” he adds.