Industry Ventures secures $900 million hybrid fund to invest in early-stage tech startups

Industry Ventures, a pioneer investment firm specializing in private technology companies, has closed a $900 million fund for its latest fund, Industry Ventures Partnership Holdings VII (Fund VII). This news comes as a boon for non-generative AI startups that are facing challenges in securing funding amidst rising interest rates.

This oversubscribed fund will target early-stage tech companies through two main channels: investing in emerging seed and early-stage venture capital funds (both primary and secondary investments) and making direct investments in the startups these funds support.

With this new addition, Industry Ventures’ total assets under management (AUM) now exceed $8 billion, with $2.3 billion specifically allocated to early-stage hybrid funds like Fund VII.

The latest fund was backed by existing and new investors including a diverse mix of leading institutions such as public and corporate pension funds, endowments, foundations, financial institutions, and family offices, along with a significant commitment from its general partner.

We covered Industry Ventures back in 2020 when the investment firm closed $125 million for its debut hybrid fund focused on direct investments and buyouts within the technology space.

Since 2007, the Partnership Holdings funds have provided patient and long-term capital to emerging venture capital managers through primary Limited Partnership commitments and early secondary Limited Partnership interests, along with direct investments in breakout growth-stage companies alongside their managers.

Roland Reynolds, Senior Managing Director at Industry Ventures, reflected on the strategy’s origins in the mid-2000s. “As the brand name funds grew larger, we saw the opportunity to partner with emerging managers who would fill the void of the larger funds moving up-market. We believed the combination of their small fund sizes and exclusive focus on the earliest stages of company formation would allow for access to transformational technology companies at the earliest stage of their life and potentially deliver outsized returns. We believe the thesis has proven true, and we think the opportunity for early-stage ventures is even stronger in the decades ahead given the tailwinds for digital transformation and surging use cases for generative AI.”

When Industry Ventures started this strategy, there were fewer than 50 small emerging managers in the space. Today, that ecosystem has exploded to over 1,000 funds.

Founded in 2000 by Hans Swildens (CEO), Industry Ventures is a premier venture capital platform managing over $8 billion in committed capital. The firm invests across all stages of the venture capital and private technology lifecycle through complementary fund strategies. Headquartered in San Francisco, Industry Ventures also has offices in Washington, DC, and London.

Since its inception, Industry Ventures has made over 725 LP interest investments, 290 direct investments, and 140 SPV investments. “We believe this is one of the largest funds raised that focuses exclusively on investing in emerging VC managers and also represents one of the largest funds to buy early secondary Limited Partnership interests in this specific market segment,” Swildens said.

“Our portfolio across Industry Ventures includes over 300 managers, representing one of the largest collections of venture capital managers globally. The additional capital in this fund will allow us to continue building on our strategy, making commitments to inaugural funds like 11.2 Capital, Altos Ventures, Amplify Partners, IA Ventures, Lowercase Capital, Pear Ventures, and others, as well as co-investing in breakout private tech companies like Uber, Stripe, Datadog, Coupang, and more.”