SAP Ventures Raises $650 Million Fund

Article by Michael J. De La Merced, New York Times on October 02, 2013

Seventeen years ago, SAP created a venture arm with the aim of gaining a toehold in promising new start-ups. Now that business is aiming to continue branching out from its parent company.

SAP Ventures plans to announce on Wednesday that it has raised $650 million for its second direct investment fund, SAP Ventures Fund II. That will supplement a $405 million fund of funds that is aimed at investing in other venture capital firms around the world.

The firm also plans to announce that it is forming a 10-person business development team intended to help portfolio companies grow.

To Nino Marakovic, SAP Ventures’ chief executive, both will help burnish the firm’s credentials as “the best fund you’ve never heard of.” But at the same time, it will maintain close ties to the enterprise software giant it spun out from in 2010. Its money comes from both its own executives and from SAP, and its headquarters are in SAP’s campus in Palo Alto, Calif.

That is not necessarily a problem, with the firm making no secret of its close ties to its parent, Mr. Marakovic said in an interview. But SAP Ventures has held discussions about bringing in other investors, and will probably follow through at some point.

At the same time, he insisted that SAP Ventures had broken from the company that gave it life. Its portfolio companies have included LinkedIn and the video advertising technology company Tremor Video. And its target industries include mobile and social networking as well as more enterprise-related sectors like so-called Big Data.

“Our alignment is with the entrepreneurial ecosystem, rather than pursuing what SAP’s strategy is,” he said.