Benchmark Capital, the storied Silicon Valley VC firm known for its early investments in eBay, Snap, Uber and Twitter, is breaking one of its signature traditions: keeping its funds to around $425 million and backing only young startups. After more than two decades of capping its cars at that amount or less, the outfit closed $2 billion in commitments for two new funds, including a $1.25 billion car dedicated to later-stage investments, according to the Wall Street Journal.
While many venture capital firms have raised billions of dollars in funding over the past decade, Benchmark has stuck to the strategy that helped make it legendary. By being hard-nosed and taking a large (typically 20%) stake in every startup the firm backs, he has maintained a model designed to generate huge returns for his limited partners.
However, Benchmark’s relatively small fund sizes have likely prevented the firm from investing in capital-intensive AI startups, particularly foundational model makers whose round sizes often reach hundreds of millions. As a result, the firm has not invested in Anthropic, OpenAI, or any of Periodic Labs, Reflection AI, or other capital-intensive AI labs. Recursive superintelligence.
Where Benchmark has placed bets on artificial intelligence, the results have been mixed. The firm led a $75 million round in Singapore-based AI agent platform Manus, which reached $100 million in annual recurring revenue eight months after launch. Meta time He agreed to buy the manuscript At nearly $2 billion late last year, it looked like another Benchmark winner in the making. But Chinese regulators – alleging that the company, which was founded in China before moving to Singapore, violated export control laws – blocked the deal in April, leaving Benchmark’s stake in limbo.
Benchmark’s new $750 million early-stage fund will give the firm more flexibility to write checks in an environment where early-stage valuations are rising rapidly. While the firm has traditionally backed companies at the Series A stage, Benchmark has recently given itself more flexibility to invest in companies at other early stages of development.
In recent months, Benchmark has backed two Series B startups: Gumloopa platform that allows businesses to create AI agents without writing code, and Monaco, an AI-powered sales and CRM platform.
Everett Randle, a senior partner at Benchmark, previously told TechCrunch that the firm is “looking to build meaningful and deep relationships with entrepreneurs, and that can happen relatively early in a company’s lifecycle, in seed, (Series) A, (Series) B.”
The firm began late-stage investing when it raised a $225 million special purpose vehicle (SPV) to participate in a $1 billion pre-IPO round for Cerebras, as TechCrunch reports. reported earlier. Benchmark first led the chipmaker’s Series A in 2016. Cerebras held an IPO last month and returned Benchmark. 3.25 billion dollars At the IPO price.
This windfall prompted the firm to create a private growth fund. The new vehicle will make five to six large investments in both existing portfolio companies and new startups, according to a person familiar with Benchmark’s strategy.
The two new funds aren’t the only changes at Benchmark. Over the past two years, the firm has undergone significant changes in its general partners.
In 2024, Miles Grimshaw left the firm Rejoin Thrive Capital. Then last year Sarah Tavel— Benchmark’s first and only female general partner to date — has taken on the role of a less involved venture partner. Victor Lazarte departed to start their own VC firm.
To bolster its ranks, Benchmark has added two new high-profile investors to its team, which traditionally works with four to six general partners: Randle, poached from Kleiner Perkins, and Jack Altman, brother of OpenAI CEO Sam Altman. The moves show that even Benchmark, long defined by its resistance to growth, is now entering the AI era, requiring a different playbook — one that requires more capital, more milestones and fresh blood at the partner table.
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