Sapphire team photo

Sapphire Ventures Raises More than $1.4B to Support Entrepreneurs in Building Category Leaders

I’m proud to announce that Sapphire Ventures has raised more than $1.4 billion in new capital commitments, bringing our total assets under management (AUM) to almost $4 billion. You can read the full announcement here.

This larger capital commitment gives us the flexibility to support more entrepreneurs who are building what we call Companies of Consequence: visionary companies that seek to change the way we work and live. We believe the added capital enables Sapphire to: 

  • Differentiate even more effectively in an increasingly competitive market for high-quality investments such as those we’ve made most recently in Brightfield, Clari, Highspot, monday.com and Moveworks (1)
  • Create an optimal fund structure with a main investment vehicle that can invest as little as $5-10M in an initial check for expansion-stage companies, combined with a new opportunity fund that can co-invest at a combined level of up to $100M per company in later-stage businesses
  • Continue to scale our Portfolio Growth team to deliver critical, value-added services to help our portfolio companies grow their revenues, partners and talent base, and
  • Diversify our base of limited partners (LPs) who can help provide access for our portfolio companies to Global 2000 customers.

The Evolution of the Venture Capital Industry

This capital infusion is another step toward Sapphire’s goal of developing the highest-quality investment platform we can for both entrepreneurs and LPs. We continue to evolve what a venture capital firm can be as we adapt to a changing market and industry. Once a niche profession, venture investing today is rapidly institutionalizing as more capital flows into the VC asset class (with approximately $100B committed across 2018 and 2019)(a) and as start-ups stay private longer. To succeed in today’s later-stage market, we believe VC firms need to be able to move quickly, write larger checks and bring more value to the table than just capital.

Here at Sapphire, we’ve long known that venture investing is about more than showing up with a checkbook and generalized best practices – hence our creation of the Portfolio Growth team in 2014 and our deep focus on enterprise IT. As we enter our 10th year as an independent venture firm, this additional $1.4 billion in capital enables Sapphire to double down on our differentiation by giving us the scale to:

  • Staff up a larger, more global and more specialized value-added support team, including new talent leaders, a European business-development presence and additional go-to-market resources
  • Expand and continue to introduce diversity across our organization and investment team at all levels, with a particular focus on the senior-most levels. 
  • Focus on building processes and systems to ensure that we remain agile and operationally excellent at everything we do -- from submitting term sheets and closing financings, to helping entrepreneurs and reporting results to our LPs.

We have been refining our platform to deliver value to entrepreneurs and LPs since our inception and the results speak for themselves. One of our stretch goals is to achieve 100% CEO referenceability, and to that end, in 2019 we:

  • Provided our portfolio with 300+ introductions to potential Global 2000 customers or partners
  • Made 250+ talent introductions to fill key executive roles 
  • Hosted and curated 75+ innovation events and executive briefings to showcase our portfolio companies to Global 2000 customers
  • Created and produced our first annual Cloud Go-to-Market Summit
  • Held our 5th annual highly successful CIO Summit, and
  • Launched an industry-first Women in Board Leadership workshop series to help identify and train the next generation of diverse board members.

We invest in these types of activities because we are committed to helping our entrepreneurs build Companies of Consequence. As part of our new capital raise, we will be further enhancing our Portfolio Growth services to help our companies with activities such as international expansion and sales optimization. Stay tuned for more information in the coming months.

Keeping the porridge just right

While we believe that expansion- and later-stage venture firms need greater scale to back the best companies, we also try to be thoughtful about keeping our organization at just the right size: big enough to expand the scope and depth of our services, but small enough to still be nimble and entrepreneurial ourselves. 

One of the benefits of having been in the venture business for 20 years – along with Sapphire’s President Jai Das and our other founding partners – is the experience to know how to right-size the platform so as not to overfund companies, or become paralyzed or risk averse by having too many decision-makers on the investment team. We’re certainly not perfect, but we strive every day to learn, grow and be better in providing entrepreneurs the right amount of capital and resources to succeed.

As a team, we’ve been through a couple of difficult economic cycles and learned a lot by backing Companies of Consequence through to exit such as Livongo that IPO’d earlier this year. Our history of 100+ total investments, 55+ exits(2), and $100B+ in enterprise value(3) we’ve helped create tells one story for sure.  But the team you see below, almost 50 Sapphires strong, is equally excited about the story we’ll be writing in the coming years as we put this new $1.4 billion in capital to work to build the next generation of Companies of Consequence.

Collage of Sapphire team

(a) Source:  https://nvca.org/wp-content/uploads/2019/10/3Q_2019_PitchBook_NVCA_Venture_Monitor-1.pdf

(1) Companies mentioned in this article are a representative sample of portfolio companies in which Sapphire Ventures has invested in which the author believes such companies fit the objective criteria stated in commentary, which do not reflect all investments made by Sapphire. A complete alphabetical list of Sapphire’s investments made by its direct growth investing funds is available here.

(2)  Exit figures represent all Sapphire Venture direct investments that had an exit by IPO during the time period of January 2011 to November 2019. 

(3) “Enterprise Value” represent the company’s total value, often called the takeover value. This calculation is based on the company’s value: either the value at the time of the company’s acquisition, or the calculated Enterprise Value of publicly traded companies as of January 1, 2019.  Sapphire Ventures was not solely responsible for the economic value created and no inference shall be made otherwise.

Nothing presented herein is intended to constitute investment advice, and under no circumstances should any information provided herein be used or considered as an offer to sell or a solicitation of an offer to buy an interest in any investment fund managed by Sapphire Ventures. Sapphire Ventures does not solicit or make its services available to the public. Information provided reflects Sapphire Ventures’ views as of a particular time. Such views are subject to change at any point and Sapphire Ventures shall not be obligated to provide notice of any change. Due to various risks and uncertainties, actual events, results or the actual experience may differ materially from those reflected or contemplated statements above. Nothing contained in this article may be relied upon as a guarantee or assurance as to the future success of any particular company. Past performance is not indicative of future results.

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