Shasta Ventures, a boutique, early-stage venture firm, has raised a new $300 million fund, its fourth fund overall.
The new fund, called Shasta Ventures IV, will, as with the other Shasta funds, have a focus on early-stage technology companies in both the consumer and enterprise software sectors.
Shasta had previously raised a $210 million fund in 2004, with which it invested in 26 portfolio companies, followed by a $250 million fund in 2007, which funded 34 companies. Most recently, Shasta's third fund, which was raised in 2011, was $265 million and funded 28 companies.
In case you were counting, that was $725 million, with a total of 88 companies funded. This latest fund pushes Shasta's total raised to $1.025 billion.
The firm says that it will use the new fund to continue focusing on Series A and Series B stage companies. The firm does this because there is a lot of opportunity to fund companies at those stages, Tod Francis managing director at Shasta Ventures, told me in an interview.
"There is lot of activity at the seed level, and we've seen lot of existing firms become larger and become only interested in companies with momentum," he said. And that leaves a gap for companies are perhaps less proven, but still have great teams, a proven product and "some element of customer activity."
That middle round is becoming "less interesting" to a lot of firms, Francis said, and Shasta is happy to fill the gap.
Shasta uses a boutique, selective strategy in terms of which companies it will fund. Francis, however, said he likes to think of it more as being "focused," than selective.
"We want to build a firm where we are familiar with companies, and where we work as a team, and that is why we want to remain focused on early stage companies," he said.
"It also means keeping the fund size manageable. And it means we do some things well, and that we don’t do a lot of other things, such as Cleantech and Biotech. We are focused on what we do, and it allows us to get smarter in those sectors."
The firm typically puts in between $4 million and $6 million for a Series A round, he told me, and between $5 million to $7 million for a Series B. Since Shasta reserves for follow-on funding, that can mean putting between $10 and $15 million into a company.
Some of Shasta's recent investments include participation in the following rounds: a $100 million round; participation in Anaplan, a provider of cloud-based modeling and planning solutions; a $50 million round for Apptio, which makes a SaaS (software-as-a-service) product to help companies manage their costs; participation in a $12 million round for mobile support infrastructure company Crittercism; a $60 million round for Nextdoor, a local social network for neighborhoods; an $80 million round in marketing software and analytics platform Turn, and a $16.6 million round for Smule, a provider of interactive sonic media for mobile platforms.
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Nextdoor (www.nextdoor.com) is a private social network for the neighborhood. Using Nextdoor’s free online platform, neighbors create private neighborhood websites where members can ask questions, get to know one another and exchange local advice and recommendations. Nextdoor is specifically designed to provide a trusted environment for neighbor-to-neighbor communication. Hundreds of neighborhoods are already using Nextdoor to build happier, safer places to call home.
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Tod Francis is with Shasta Ventures. He focuses his investing activity on early stage companies that leverage technology to improve consumer experiences.
