We have been in a huge global economic slump for several weeks now due to the coronavirus pandemic, but in the midst of it we are seeing some remarkable pockets of investment activity that will help shape the future startup landscape. Today, one of the largest venture capital firms in the world announced the closure of a huge fund, the bulk of which will be used to help the portfolio business cope with the storm.
Insight, the company that has supported such businesses, Twitter and Shopify are investing in a number of startups for consumers and businesses (a total of 400) and announced today that they have closed a $ 9.5 billion fund to have. This money will be used to support startups and "scale-ups" (larger and older startups that are still private) in the coming months. Investments will typically range between $ 1
"First and foremost, we want to acknowledge the current climate and difficulties around the world," said Jeff Horing, founder and CEO of Insight Partners in a statement. “We are grateful and humble for the support from our investors, which enables us to continue to provide first-class resources in turbulent economic times. Fund XI continues to offer us flexibility to provide the combination of capital and operational support that meets the different needs of every software company in a dynamic world. “
This fund, number XI, brought a number of recurring supporters along with new investors. and it's record size for the company. It also appears to have been oversubscribed as the fund was valued at just over $ 7 billion in November when it was launched. It is all the more impressive that it was only closed this week, at a time when many startups feel the risk of a business downturn and either lay off employees or freeze hires to lower costs, which causes investors to get one little shaky.
Insights Fund is a signal for two issues. One of them is that there are already a few silver lines in which there is enormous activity in certain business areas (video conferencing to connect all the people who are now seeking protection at home, those who are helping to ensure that the delivery of food works , Entertainment streaming companies and such The focus on medical research or telehealth are just five categories that have a positive impact (there are more) and this fund will help Insight invest in these opportunities so that these companies can grow to to meet demand.
The second topic is a little less optimistic but still important, and that is the fact that there are a number of very promising ideas. These have already been supported by VC funds that do not support the current economic crisis will not survive, VC funds will probably be scanned very selectively to help in such situations, along with a stronger tightening of the financial belt and other funding (for example, loans that the US government grants through the CARES law to help small businesses get lean at times) caused by the coronavirus pandemic.
Indeed, a spokesman said Insight would focus "on supporting its portfolio companies" with current and funded funds in the near future.
We have tried to see if we can. Learn more about how new investments versus reinvestments in existing portfolio companies will be considered in future financing, and we also ask if there are certain categories that are currently of particular interest are. We will update this post as we learn more.
"The global software ecosystem has matured since our first investment 25 years ago, although it continues to innovate, which drives Insights' own procurement innovation and our data-driven partnership approach to work with ScaleUp companies as a minority or buyout investor." said managing director Deven Parekh. "We are grateful that Insight Partners remains a sought-after institutional platform to support next-generation software companies due to business cycles and unprecedented circumstances."
In a separate letter to the investors, Horing and Parekh also stated the currently complicated climate – this includes not only the challenge that VCs are currently collecting donations in a climate of LPs, but also the fact that not all startups are involved can leave all of their investors to support them in these challenging times. Difficult decisions have to be made at all levels.