Norwest Venture Partners raises $3B for 17th vehicle, maintaining fund size despite market downturn

Norwest Venture Partners, a 65-year-old company backed solely by Wells Fargo, raised its 17th fund at $3 billion.

That’s a remarkable figure, considering NVP last raised the same amount in December 2021. That was the peak of the venture capital boom, and around that time the company said it increased its capital pool. equity by 50% (NVP’s 2019 fund closed at $2 billion). ) because it needed to remain competitive in a trading environment where deal sizes and valuations have reached unprecedented levels.

But things have visibly changed since then. Investors are backing fewer companies and valuations have fallen and could fall even more.

Senior managing partner Jeff Crowe admitted that the rate of investment in venture capital and some sectors is slower than several years ago, but he said deal-making in some strategies, sectors and geographies, such as growth capital, healthcare and India, is as robust as before the economic downturn.

“We kept a very steady pace and had a number of nice releases,” Crowe told TechCrunch. “We thought it made sense to continue at the same pace.”

Since closing its previous fund, the company has helped 36 companies obtain liquidity. Not all exits have been good results for the company (NVP’s holding company VanMoof filed for bankruptcy protection), but returns from some exits far exceeded losses, according to Crowe. He highlighted the company’s sale of Spiff to Salesforce, the redemption of Avetta by EQT for a reported $3 billion, and the IPO of India-based Five Star Business Finance.

Crowe declined to comment on returns, but said: “It’s fund 17. We’ve been doing this for a long time, and in the venture capital world you can stay in business if you get really good returns.” »

NVP attributes much of its success to operating as one large global multi-strategy fund. The company invests in North America, India and Israel. It has a private equity and growth practice, and recently added a biotechnology team to complement its existing healthcare practice.

The diversified approach allows the company to adjust its strategy when the market changes. For example, NVP planned to invest in crypto companies in its last fundraising round, but the sector fell out of favor soon after and the company did not close many deals in this space.

“Our diversified strategy performs well despite the ups and downs of investment cycles,” Crowe said. “It gives us flexibility. That’s all its beauty. We respond more quickly to changes.