Benchmark raises its first-ever growth fund as part of $2B capital raise
Benchmark Capital, the storied Silicon Valley VC firm known for early investments in eBay, Snap, Uber, and Twitter, is breaking with one of its signature traditions: keeping its funds to about $425 million and backing only young startups. After more than two decades of restricting its vehicles to that amount or lower, the outfit has closed on commitments of $2 billion across two new funds, including a $1.25 billion vehicle dedicated to later-stage investments, according to the Wall Street Journal. While the fund sizes of many venture capital firms have ballooned into billions of dollars over the last decade, Benchmark stuck to the strategy that helped make it legendary. By being staunchly selective and taking a large—typically 20%—stake in every startup the firm backed, it maintained a model designed to maximize outsized returns for its limited partners. However, Benchmark’s relatively small fund sizes have likely prevented the firm from investing in capital-intensive AI startups, particularly foundation model makers, whose round sizes often reach into hundreds of millions. As a result, the firm hasn’t invested in …
