Jafco Ventures raises $260 million for fifth fund

The firm has seen over 20 exits, with companies valued at over $23 billion

Venture capital firm Jafco Ventures, which specialized in mid-stage investments, has raised a new $260 million fund, it was announced on Thursday. This is Jafco's fifth fund, and its largest one yet.

The firm had previously raised two funds of $100 million each, followed by two funds of $150 million each. It has now raised a total of $750 in total funding.

The reason for the increase in fund size, Joe Horowitz, Jafco's General Managing Partner, told me, is because companies are now raising larger amounts, and the firm wanted to be able to keep up with that trend.

Still, he noted, the firm did not want to go overboard with the size of the fund. They wanted it to be enough to invest in roughly 15 to 20 companies, but not so much that it would "be a drag on returns."

Jafco, as it has with every fund, received capital from its limited partner in Japan, Jafco, Co. Unlike all of those other funds, though, it also added new partners to the mix as well this time. In all, Jafco received funding from over twenty new limited partners, which consisted of institutional investors, endowments, foundations and family offices.

Among those were Greenspring, who Horowitz told me was a "very substantial investor in fund." and Industry Ventures.

“We are really pleased at both the mix and the quality the investors and the fact that they’re all really nice people and they get us," said Horowitz.

Jacobs will use this funding to invest in many of the same spaces that early investor do, including enterprise infrastructure, security, cloud computing, big data and some investments on the consumer side.

The firm has already used some of the money, which was forwarded to it by its Japanese partners before it closed the fund with new investors,  to make investments. It put $15 million into Zephyr Health, and then another $15 million into Origami Logic, both in January. The firm also invested $25 million into Ionic Security in March. 

Founded 10 years ago, Jafco, which focused solely on Series B and C deals, has seen over 20 positive exits, with 15 of which have an aggregate market value today of over $23 billion. That includes Aster Data, which was acquired by Teradata for $263 million in 2011; MoPub, which was acquired by Twitter; and Palo Alto Networks, Infinera FireEye and Proofpoint, all of which went public.

Horowitz credits the success of the firm to its philosophy.

"We provide the support of our entire team and spend time with the entrepreneurs," he said. "If the team is too large, or we start making investments that aren’t core to our focus, it becomes harder to do that. We take great pride with working with smaller team, and medium sized funds."

(Image source: jafco.com)