General Catalyst Raises $675M, Wants to Grow Silicon Valley Office

12/23/13Follow @curtwoodward

Venture capital firm General Catalyst Partners has raised $675 million for its seventh investment fund, saying it wants to continue investing in fast-growing companies from coast to coast—with a special focus on Silicon Valley.

The deal, announced today, comes about two years after General Catalyst raised $500 million for its sixth fund. The firm has invested in some of the more popular VC-backed tech companies in recent years, including Snapchat, Warby Parker, Stripe, Hubspot, and Kayak.

General Catalyst was founded in the Boston area in 2000 and maintains an office in New York. The firm expanded to the San Francisco Bay Area about three years ago, and said in a news release that it hopes the seventh fund “enables General Catalyst to expand its current portfolio of more than 100 transformative technology businesses with emphasis on growing its Silicon Valley presence.”

Bloomberg News reported in October that General Catalyst was raising this fund, saying it was seeking about $600 million.

General Catalyst makes early stage investments in consumer technology, behind-the-scenes software systems, and clean energy. The firm only lists a handful of cleantech portfolio companies on its webpage, however, and doesn’t mention the struggling sector in today’s fund announcement.

General Catalyst also makes growth equity investments, typically carving off $10 million-$50 million to support growth or buy out earlier shareholders in growing companies with at least $10 million in revenues.

In its blog post, the firm notes that it’s been through some tough economic periods—“When we founded General Catalyst in Boston back in 2000, the tech world was falling apart from the collapse of the dot-com bubble.”

The damage from those years show in returns for the firm’s first fund, according to figures posted online by the state of California. As of March 2013, General Catalyst’s debut fund had essentially just returned the money invested into it.The second fund did much better—California doubled its money on that 2001-vintage fund, counting cash returned and remaining value.

It can be pretty dicey to judge VC fund performance until they’ve been around for 10 years or more, because startup investments tend to take years before they pan out or flame out. But General Catalyst’s blog post is obliquely highlighting some recent successes, saying that “just in the past three years, our founders have created over $8 billion of value.”

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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