Benchmark Capital, the storied Silicon Valley VC agency recognized for early investments in eBay, Snap, Uber, and Twitter, is breaking with one in all its signature traditions: conserving its funds to about $425 million and backing solely younger startups. After greater than twenty years of proscribing its autos to that quantity or decrease, the outfit has closed on commitments of $2 billion throughout two new funds, together with a $1.25 billion automobile devoted to later-stage investments, in response to the Wall Road Journal.
Whereas the fund sizes of many enterprise capital corporations have ballooned into billions of {dollars} during the last decade, Benchmark caught to the technique that helped make it legendary. By being staunchly selective and taking a big—usually 20%—stake in each startup the agency backed, it maintained a mannequin designed to maximise outsized returns for its restricted companions.
Nevertheless, Benchmark’s comparatively small fund sizes have possible prevented the agency from investing in capital-intensive AI startups, significantly basis mannequin makers, whose spherical sizes typically attain into a whole lot of thousands and thousands. Consequently, the agency hasn’t invested in Anthropic, OpenAI, or any of the opposite capital-intensive AI labs, corresponding to Periodic Labs, Reflection AI, or Recursive Superintelligence.
The place Benchmark has positioned AI bets, the outcomes have been combined. The agency led a $75 million spherical in Manus, a Singapore-based AI agent platform that hit $100 million in annual recurring income inside eight months of launching. When Meta agreed to acquire Manus for roughly $2 billion late final 12 months, it seemed like one other Benchmark winner within the making. However Chinese language regulators — arguing the corporate, which was based in China earlier than relocating to Singapore, had violated export management legal guidelines — blocked the deal in April, leaving Benchmark’s stake in limbo.
Benchmark’s new $750 million early-stage fund will give the agency extra flexibility to jot down checks in an surroundings the place early-stage valuations have skyrocketed. Whereas the agency has historically backed corporations on the Sequence A stage, Benchmark has lately given itself extra flexibility to put money into corporations at different early levels of growth.
In current months, Benchmark backed two Sequence B startups: Gumloop, a platform that enables enterprises to create AI brokers with out writing code, and Monaco, an AI-native gross sales and CRM platform.
Benchmark common companion Everett Randle beforehand informed TechCrunch that the agency appears to be like to construct a “significant and deep relationship with the entrepreneurs, and that may occur comparatively early within the firm’s lifecycle, at seed, [Series] A, at [Series] B.”
The agency dipped its toe into late-stage investing when it raised a $225 million particular objective automobile (SPV) to take part in a $1 billion pre-IPO spherical for Cerebras, as TechCrunch reported earlier. Benchmark first led the chipmaker’s Sequence A in 2016. Cerebras held its IPO final month, returning Benchmark $3.25 billion on the IPO worth.
That windfall prompted the agency to lift a devoted progress fund. That new automobile will make 5 to 6 massive investments in each present portfolio corporations and new startups, in response to an individual aware of Benchmark’s technique.
The 2 new funds aren’t the one adjustments at Benchmark. During the last two years, the agency has undergone a big shift in its common companions.
In 2024, Miles Grimshaw left the agency to rejoin Thrive Capital. Then, final 12 months, Sarah Tavel—Benchmark’s first and solely feminine common companion thus far—took on the less-involved function of enterprise companion, whereas Victor Lazarte departed to begin his personal VC agency.
To replenish its ranks, Benchmark — which historically runs with 4 to 6 common companions — added two new high-profile buyers to its workforce: Randle, poached from Kleiner Perkins, and Jack Altman, the brother of OpenAI CEO Sam Altman. The strikes recommend that even Benchmark, lengthy outlined by its resistance to progress, now sees the AI period as requiring a distinct playbook — extra capital, extra levels, and contemporary blood on the companion desk.
While you buy via hyperlinks in our articles, we may earn a small commission. This doesn’t have an effect on our editorial independence.
