Norwest Venture Partners, a 65-year-old firm backed exclusively by Wells Fargo, has raised its 17th round of funding at $3 billion.
That’s a remarkable number, given that NVP last raised the same amount in December 2021. That was the height of the venture boom, and at the time, the firm said it grew its fund pool by 50% (the fund of NVP in 2019 closed at $2 billion ) because it had to remain competitive in the trading environment where round sizes and valuations have risen to unprecedented levels.
But things have obviously changed since then. Investors are backing fewer companies and valuations have fallen and may fall further.
Jeff Crowe, senior managing partner, admitted that the pace of investment in businesses and in some sectors is lower than it was several years ago, but said deal-making in some strategies, sectors and geographies, such as growth equity, healthcare and India, is as robust as it was before the recession.
“We’ve kept a very steady pace and delivered a lot of nice exits,” Crowe told TechCrunch. “We felt it made sense to continue at the same pace.”
Since closing its previous fund, the firm has helped 36 companies gain liquidity. Not all exits have been great results for the company (an NVP portfolio company VanMoof filed for bankruptcy), but returns from some exits more than offset the losses, according to Crowe. He pointed to the sale of the company Spiff to Salesforce, its acquisition Avetta from EQT for a reported $3 billion and the IPO of India-based Five Star Business Finance.
Crowe declined to comment on the returns, but said: “This is fund 17. We’ve been doing this for a long time, and in the venture world, you can stay in business if you have really good returns.”
NVP attributes much of its success to operating a large global multi-strategy fund. The company invests in North America, India and Israel. It has an early-stage and growth equity business and recently added a biotechnology team to complement its existing healthcare practice.
The differentiated approach allows the business to adapt its strategy when the market changes. For example, NVP planned to invest in crypto companies when it raised its last capital, but the industry fell out of favor shortly after that and the firm didn’t pursue many deals in the space.
“Our diversified strategy works well through the ups and downs of investment cycles,” Crowe said. “It gives us flexibility. That’s the beauty of it. We react faster to changes.”
