Former Battery Ventures VC Dhaliwal Launches New IT Fund

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in early 2010.

Battery lists active investments in nearly 100 companies across a half-dozen tech sectors, including software-as-a-service (Avalara), social media (Backplane), e-commerce (HotelTonight and Wayfair), and IT infrastructure software (Opscode). The firm is now raising its tenth venture fund, reported by Dow Jones to be $650 million.

Dhaliwal says limited partners saw the same thing happening—and were enthusiastic about betting on a new infrastructure-focused small fund like Amplify Partners.

“As I talked to a lot of investors, they said, ‘This was what venture capital was like.’ It was guys who went out and focused on a market and focused on turning small amounts of money into bigger amounts of money, taking the right set of risks,” Dhaliwal says.

There are similar generational forces shaking the IT industry. Aside from the technological changes shaking up the way that big clusters of servers are put together and operated—a seismic change on its own—Dhaliwal says today’s IT pros don’t want to deal with outdated software interfaces and big-dollar, long-term contracts sold by a tech giant.

Instead, they’re looking for hardcore IT software to have the same try-it-first business models and easy-to-use features so common on the Web today.

If there’s in the neighborhood of $1 trillion in market capitalization for the big boys today, “I’m pretty sure the startups are going to capture at least a couple hundred billion dollars of that value,” Dhaliwal says.

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