Technology Investor Lead Edge Capital Raises $950 Million as VC Sector Swells

By Marc Vartabedian

Lead Edge Capital raised a $950 million fund for growth-stage technology investing, adding to the already soaring fundraising total for the sector.

Lead Edge Capital V LP, which closed at its hard cap, is more than 80% larger than its predecessor fund, which closed in 2018 at $520 million.

The new fund will write checks of up to $150 million to fuel mature startups that are capitalizing on society’s increasing embrace of digital technologies, a trend that has been pushed forward by the coronavirus pandemic, said Lead Edge founder and Managing Partner Mitchell Green .

“We believe that this pandemic has accelerated digital transformation across all industries, which has validated our investment thesis, which is digital businesses over the last decade have been a net share gainer over traditional old-school legacy businesses,” Mr. Green said.

The new fund comes after Lead Edge notched exits from several portfolio companies this year. Work management software company Asana Inc. launched a direct listing on the New York Stock Exchange in September and cybersecurity company Signal Sciences LLC entered into a $775 million acquisition agreement with Fastly Inc. this summer.

Lead Edge also is an investor in financial-tech giant Ant Group Co., which is awaiting regulatory approvals for a pair of stock sales in Asia that could raise more than $30 billion in total, making it the largest initial public offering in history.

Venture firms have continued to raise capital at a healthy clip throughout the pandemic. Through the third quarter of this year, venture firms in the U.S. have raised $56.6 billion across 228 vehicles, already surpassing last year’s full-year total and putting this year on pace to notch a record high for the total capital raised in one year, according to a report from data analytics firm PitchBook Data Inc. and the National Venture Capital Association.

Investors largely have been undeterred in backing technology-focused venture firms, thanks to the fact that share prices for tech companies have been on a tear for much of the year, Mr. Green added.

“I think investors are leaning into private funds focused on managers that have an expertise around technology,” Mr. Green said. “Investors believe that the same tailwinds that benefit public software and internet companies are also going to benefit private software and internet companies.”

The fund tapped roughly 500 limited partners, the majority of whom are business executives that participate in the fund as individual investors and act as advisers to the firm’s portfolio companies. Meg Whitman , the former chief executive of Hewlett-Packard Enterprise Co. and current CEO of streaming platform Quibi Holdings LLC, and Alison Rosenthal, the former head of mobile at Facebook Inc., participated in Lead Edge’s latest fund.

Mr. Green added that the pandemic forced a change to his fundraising tour, forcing him to talk to potential LPs virtually instead of traveling to meet them.

The new vehicle is Lead Edge’s fifth fund since the New York-based firm was founded in 2009 and brings its total capital raised to over $3 billion.