Sapphire Ventures Raises Record Capital for New Funds

Sapphire Ventures Secures $2 Billion in New Funding

Sapphire Ventures is deploying $2 billion in fresh capital to fuel the growth of enterprise-level companies. This investment is being channeled through two newly established funds: Sapphire Ventures Fund VI and Sapphire Ventures Opportunity Fund III.

This latest funding round marks the venture capital firm’s largest capital raise to date. According to Nino Marakovic, CEO of Sapphire, the firm now manages assets exceeding $8.8 billion. The team operates across key global locations including Austin, London, New York, Palo Alto, and San Francisco.

Recent Capital Inflows

Over the past year, Sapphire has successfully raised a total of $3.7 billion in capital. This figure incorporates a separate $1.7 billion announced earlier in February, specifically designated for investments in enterprise technology businesses, as stated by Marakovic.

Larger funding rounds are now commonplace, necessitating larger investment amounts to maintain leadership and active participation. The firm emphasizes its role as a proactive advisor, highlighting this as a key differentiator.

Fund Strategy and Timeline

Marakovic anticipates that both funds will remain active through the end of 2022. Fund VI is planned to support 20 to 30 companies, while the Opportunity Fund will focus on a smaller cohort of investments, but with significantly larger individual check sizes.

Recent investment activity by Sapphire includes allocations to companies such as Verbit, PubNub, Yugabyte, and Medable.

Firm History and Investment Focus

Founded in 1996, Sapphire Ventures concentrates on investments from Series B funding through Initial Public Offering (IPO) stages. Its geographic focus encompasses the U.S., Europe, and Israel.

The firm is actively expanding its value-added resources and its presence in Europe and Israel. Plans are underway to establish new offices in Berlin and Tel Aviv.

Investment Areas include:

• Enterprise SaaS
• Infrastructure Software
• Fintech
• Healthcare IT
• Crypto-Infrastructure

Notable past investments include prominent companies like DocuSign, LinkedIn, Fitbit, Box, Sumo Logic, and 23andMe.

Investment Performance and Team Expansion

In 2021, Sapphire deployed $990 million in capital, a slight increase from the $970 million invested in 2020. The firm also added 26 new companies to its portfolio during the year.

Across its portfolio of 165 companies, over 70 exits have been realized, comprising 30 IPOs and 45 acquisitions.

Alongside the new funds, Sapphire has also strengthened its leadership team with the additions of Cristina Hohlman as CFO, Ellie Javadi as CMO, and Kevin Burke as Vice President of Strategy.

Navigating the Current Investment Landscape

Marakovic characterizes the current investment climate as one requiring venture capital firms to be adaptable and conduct thorough due diligence prior to fundraising.

A shift in approach is occurring, with an emphasis on early engagement with companies. Building relationships with founders before they actively seek funding allows firms to be prepared when fundraising commences, particularly for those with established domain expertise.

Future investments are expected to concentrate on software and business applications. Fintech and health IT are also identified as promising areas, alongside blockchain technology, which Marakovic views as a “fundamental new building block” with significant potential in the emerging web3 landscape.