Boston’s OpenView Nabs $200 Million for Oversubscribed Third Fund
March is shaping up to be pretty sunny in Boston, both on the weather and the venture fundraising fronts. Boston-based OpenView Venture Partners is announcing today that it just closed a $200 million third fund, surpassing its initial $150 million target and securing all of its commitments in three months, according to managing director Adam Marcus.
All of OpenView’s LPs returned for the third fund, and all upped their commitments, says Marcus. The Boston firm has a pretty specific method for identifying investment opportunities—business-to-business software companies making $2 million to $20 million in annual sales and wanting to get to $100 million in revenue—a focus that proved beneficial when fundraising, Marcus said. OpenView typically invests $5 million to $15 million in those startups.
“Since 2006 we stuck with our mission and kept our discipline to expansion stage tech companies,” says Marcus, noting many VC firms have broadened, adding focuses on seed stage deals. “We stuck to our knitting. Our LPs were very happy to see that.”
The firm also has a consulting arm called OpenView Labs, which offers recruiting, research, and marketing services to its portfolio companies. (I profiled that division earlier this year.) Last month, the Labs division announced that it filled more than 50 positions across its portfolio companies in 2011. That’s been another boost for the firm in its LPs’ eyes, says Marcus.
OpenView started talking to investors in October and had closed the first $100 million of the fund late last year, which my colleague Greg reported in January as part of a VC funding roundup. At the time, local VCs Excel Venture Management, .406 Ventures, Kepha Partners, and Flagship Ventures were also pulling together funds in the range of $100 million to $250 million. And earlier this month, news surfaced that Bessemer Venture Partners, Greylock Partners, and Summit Partners are all in the process of raising big funds.
OpenView got started in 2006 with a $108 million fund and closed a second fund, at $131 million, in 2009. The firm has 18 portfolio companies and has completed one exit in its history, selling LoyaltyLab to TIBCO in December 2010 for $23 million. Earlier this month it invested in a follow-on round for Exinda, a maker of network optimization technology. Marcus says it will be announcing the first deal from its third fund sometime next week.
Erin Kutz is an Associate Editor for Xconomy. You can reach her by e-mail at [email protected] or by phone at (617) 252-0700, or follow her on Twitter at @erkutz.