Menlo Park, Calif. and Chevy Chase, Maryland-based New Enterprise Associate’s (NEA) 16th fund marks the largest venture fund to date, according to Dow Jones VentureSource. The forty-year-old venture firm announced the close of its mega $3.3 billion fund in mid-June, just surpassing the size of its $3.15 billion pool raised in 2015.
As investors increasingly seek a stake in the high-growth tech startup scene through a small number of leading VC firms, NEA has secured its spot among the top ranking firms.
The multistage investor with eight offices around the world, including locations in San Francisco, New York, Beijing and Mumbai, focuses on technology and healthcare startups. Within the larger technology space, NEA hones in on several key sectors including electronics, consumer technology, enterprise mobility, virtualization, tech-enabled services, SaaS and cloud computing. Alongside its solid network across the U.S., NEA actively invests across six continents, with emphasis on emerging markets including in India and China.
NEA, which prides itself as the industry’s “first truly bi-coastal firm,” is known for its investments in successful companies across a broad array of industry sectors, from seed to very late-stage deals. In August, the firm exited Hoboken, NJ-based e-commerce giant Jet.com in a $3.3 billion cash and stock sale to Wal-Mart Stories after leading its Series A round two years prior. Other investments include Data Domain, Tableau Software, Desktop Metal, Fusion-io, Opower and Opendoor. According to data from limited partner California State Teachers’ Retirement System, NEA’s 2009 vintage Fund 13 secured an internal rate of return of 18.82% as of September 30th, 2016.
Recently, NEA has focused on genetics-related startups in healthcare as the cost of sequencing genomes declines. NEA is also seasoned in guiding companies to make the jump from online to offline, such as portfolio company Casper, a mattress delivery platform popular among Millennials.
“There is this tool kit that is changing the physics of innovation and company-building in a literal sense,” said Scott Sandell, managing general partner at NEA.
Sandell highlighted a recent survey by NEA suggesting that its portfolio companies are actively disrupting across over 36 different industries. The American VC leader is paying close attention to innovators using machine learning and artificial intelligence in the high-growth software and cloud-related startup world, says Sandell.
In 2015, NEA closed its last fund at $2.8 billion, along with an additional $350 million raised at the same time for an “opportunities” fund dedicated to later-stage portfolio companies. Sandell says the firm has not yet finished investing out of its opportunity fund and has not decided whether it will raise another one. NEA confirms it has already started investing out of its new main fund.
With the new fund, Sandell has become NEA’s sole managing general partner as part of a long-planned generational leadership transition. In its previous fund, Sandell joined co-managing general partner Peter Barris. Mr. Barris now remains a general partner and has taken the position as chairman, while former chairman Dick Kramlick is now chairman emeritus. Alongside Mr. Sandell and Mr. Barris, NEA’s general partners are Forest Baskett, Tony Florence, Mohamad Makhzoumi, Josh Makower, Dave Mott, Chetan Muttagunta, Jon Sakoda, Pete Sonsini and Ravi Viswanathan.
While NEA’s massive new fund quickly follows the close of its fifteenth fund by traditional standards, the announcement comes as less of a surprise given similar news from VC peers such as Accel Partners, Lightspeed Venture Partners and Founders Fund, who have all closed new mega-funds in 2016 less than two years after closing funds in 2014.
Last year, NEA’s Harry Weller, who long held the position as the head of the East Coast venture practice, suddenly passed away at age 46. In his memory, the firm has launched the Harry Weller Big Fund Idea, a charitable giving program administered by T. Rowe Price.
This week, NEA, along with VC peers who also back Internet company Cloudfare, Venrock and Pelion Venture Partners, announced a joint commitment to allocate $100 million to support startups that build applications atop Cloudfare’s technology.