Scale Venture Partners, the now 20-year-old venture capital firm, is looking to raised $500m for its seventh fund, according to news provider Wall Street Journal (WSJ). The firm closed its most recent fund with $400m in 2018 but there is a nice synergy to its target given Bank of America was the sole limited partner for its first fund with $500m.
Then known as BA Venture Partners, Scale renamed itself when it spun out and raised third-party capital in 2007.
The model is increasingly popular, such as venture firm Propel spinning out from bank BBVA or Sapphire from SAP.
But the variation since BA/Scale’s day has been corporations often retain a strategic corporate ventures team in-house as well, such as BBVA’s Rohan Handa or SAP’s Ram Jambunathan, or create from scratch a new VC firm where it can be a sole limited partner to run alongside its existing CVC unit, such as Cisco’s decision to back Jon Sakoda’s Decibel VC firm alongside its internal Cisco Investments and corporate development unit under Derek Idemoto.
Another is Japan-based phone operator NTT, which nearly two years ago backed Vab Goel with $500m. Goel, an alumnus from Norwest Venture Partners, an independent-managed VC firm running money for bank Wells Fargo to complement its Wells Fargo Strategic Capital CVC unit under Osei Van Horne, said: “We have been quietly investing in world-changing companies since the fund’s inception.”
Goel’s NTTVC’s fifth deal announced this week is an investment in Celona, which helps enterprises build their own private, 5G mobile networks. The other NTTVC portfolio companies are Eko, Nference, Shoreline.io and UDP Labs where NTTVC can try and lead or co-lead rounds across all sectors with an emphasis on the future of enterprise, digital health and innovations powered by artificial intelligence, machine learning and data potentially relevant to NTT, Goel added.
He said: “Seven years ago, NTT acquired Virtela, a company where I was both a founder and investor. Since then, I have had an opportunity to collaborate closely with NTT’s leadership team and have witnessed firsthand NTT’s commitment to embracing the startup ecosystem, along with its ability to help cutting-edge technologies reach global scale. Together, we developed the idea of an independent, returns-driven venture capital fund that could harness the reach of NTT.
“NTTVC offers entrepreneurs the best of both worlds: an independent and agile VC firm coupled with unique access to NTT’s massive ecosystem serving 75 million mobile subscribers, three million businesses, and 120,000-plus enterprise customers, with a local presence in over 80 countries….
“The decision of whether, when and how to leverage NTT is completely up to our companies.”
From NTT’s view, having NTTVC creates optionality to its existing NTT Docomo Ventures unit run by Tak Inagawa, a GCV Powerlist 2020 award winner.
Whether it follows Bank of America’s footsteps and lets other limited partners in will depend as much on its cash position and Goel’s desire.
Some things never change.
