With an active portfolio that includes Pinterest, Box, Twitch and Shopify and an exit history that counts LinkedIn, Criteo and Yelp among others, Bessemer Venture Partners is among the most established and successful venture capital firms in the country. Here’s our teardown of Larchmont N.Y.-based Bessemer Venture Partners.
Notes:
- Where’s the data & viz from? 100% of the visualizations and data you see in this teardown are directly from the CB Insights platform’s Investor Analytics tool.
- What’s a Teardown? A product teardown is the act of disassembling a product to understand its parts, functionality, etc. An investor teardown is analogous. We’re trying to understand a firm and what makes it tick by analyzing data around their financing strategy, investment thesis, key people, exit history, investment syndicates and more.
We’ll take a look at trends and highlights in BVP’s portfolio over the past few years by analyzing the following dimensions:
- Funding activity
- Exit activity
- Fundraising history
- Notable people
- Industry & geography shifts
- Financing trends
- Stage strategy
- New & follow-on trends
- Investment syndicates
Funding Activity
Bessemer is a very active venture capital firm, and invests in a range of sectors including ad tech, data security, financial services, healthcare, and the enterprise SaaS market. (The firm frequently updates a ‘BVP Cloud Index’ tracking public cloud computing cos). In 2013 and 2014, Bessemer has averaged participation in almost 5.2 deals per month with median deal size of $12.3M per round. Other notable investments by Bessemer include:
- Snapdeal – the India-based daily deals site managed to raise almost $150M in its Series D round last February. Bessemer has been a long-time investor in the company, participating in its Series B, C, and D rounds since 2011. Snapdeal was last valued at $1B.
- Shopify – the worldwide eCommerce platform raised $100M from the likes of Bessemer, Insight VP, FirstMark Capital, and Felicis Ventures in its Series C round last December. Bessemer contributed to the company’s Series A and B rounds as well. Canada-based Shopify was also last valued at $1B.
- Box – an online cloud storage provider that raised $100M in its Series F round last December, in which it was valued at around $2B. Bessemer began investing in Box since it held a Series D-II round in 2011. In its most recent financing from TPG Growth and Coatue Management, Box was valued at $2.4B.
Overall, the VC’s deal activity remained relatively stable with a 6% increase in deal participation year-over-year.
Exit History
As shown in the scatter of Bessemer’s exits by type and valuation below, the firm’s portfolio exit frequency seems to have increased since 2012. We have also seen an increase in the proportion of Bessemer’s exits that are IPOs – with 26% of exits coming via IPO since 2012.
Some of Bessemer’s most recent notable exits include:
- Criteo – the company, which provides online display advertising services, held an IPO last October in which it raised over $250M from selling shares to the public. At the the time, Criteo was valued at almost $2B. Bessemer invested in the company in its Series C (2010) and D (2012) rounds.
- Wix – the web development platform went public in November 2013 at a valuation at the time of exit of $600M. BVP first invested in Wix’s Series A round starting in 2007.
- Skybox Imaging – this technology start-up designs and manufactures high-resolution microsatellites for global imaging, and was acquired by Google earlier this month for $500M. Bessemer invested in the company in its Series B and C rounds, beginning in 2010.
Fundraising History
Bessemer has raised almost $2.5B for its last three funds since and most recently with its largest-ever fund of $1.6B in 2011. Below are its latest fundraises:
Notable People
Here’s a shortlist of some of the important people at Bessemer VP:
David Cowan is a partner at Bessemer and has been with the firm since 1992. His investments includes Defense.net, Dropcam, LifeLock, LinkedIn, Nominum, and Skybox Imaging to name a few. Over 20 of Cowan’s investments have gone public. He currently sits on the boards of Smule, Endgame, LifeLock, and Zoosk, and frequently shares boards with Ted Schlein (KPCB), Sunil Nagaraj (Bessemer), and Deepak Kamra (Canaan Partners).
Bob Goodman is the founding partner at Bessemer’s New York office and joined the firm in 1998. Mostly focused on the software, mobile, digital media, and healthcare technology markets, he has led many successful exits of companies like Intucell, Broadsoft, Flarion Technologies, and Bladelogic. Currently, Goodman sits on the boards of Millennial Media (now public), Apperian, Syncsort, and Cloudlock. He has shared boards with Peter Sobiloff (Insight VP), Rob Soni (Matrix Partners), and R. Philip Herget (Columbia Capital).
Jeremy Levine joined Bessemer in 2001 and focuses on software and Internet companies. He’s perhaps best known for Bessemer’s investments in Pinterest, Wikia, Yelp (IPO), and Shopify, and Levine currently serves on the boards of each. He also led Bessemer’s investment in LinkedIn, which went public in 2011.
Rob Chandra entered the venture capital profession in 1996, and in that time has worked with 25 successfully-exited startups. Chandra focuses on the cleantech, data infrastructure, hardware, and mobile sectors and has worked with Altiga Networks (acquired by Cisco), Mellanox Technologies (now public), and Berkeley Design Automation (acquired by Mentor Graphics). He currently sits on the boards of Snapdeal, Tilera Corporation, and Avnera Corporation, and was named to Forbes’ Midas List in four consecutive years.
Industry & Geography Shifts
At the industry level, Bessemer is involved mostly in the internet (SaaS and eCommerce), mobile, healthcare, and computer services markets. In the funding heatmaps below, block size represents number of deals and color represents amount of total funding.
The firm’s deal activity to Internet-related ventures grew from 35% of total deals in 2010-11 to 39% of deals in 2012-13. Mobile software venture investments grew over 50% between the periods, from 10 deals in the prior two years to 21 deals in the latter. Bessemer’s computer services deal activity also grew mostly due to more deals in IT services ventures, almost tripling between periods to 6% of deals.
Healthcare-related investments declined most in the four years, falling from 11% of deal activity to about half of that in 2012-13. The decline was mostly due to less deal participation in the pharmaceutical and biotechnology sub-industries.
Globally, the share of Bessemer’s deals in North America grew slightly to comprise 88% of total activity in 2012-13, up from 83% in 2010-11. During the same period the firm’s investments in Asia declined slightly, partly due to increasing investment in Europe. Within the United States, funding to California-based ventures dropped to slightly under half of all US deals in 2012-13, made up by Bessemer’s growing investments in Massachusetts (15% of deals) and New York (13% of deals).
Financing Trends
As shown in the graph below, the size of deals Bessemer participated in surged around late 2011 and early 2012. We can attribute this to involvement in many large funding rounds for companies like Box, LifeLock, Skybox Imaging, and Pinterest during those quarters. In the beginning of 2014, Bessemer’s median deal size spiked to $20M because of many large funding rounds for GFI Software, Snapdeal, Clearslide, and Mindbody that raised a total of almost $300M that quarter. More recently, Bessemer has participated in large deals to the likes of Pinterest and the eCommerce site Blue Apron.
Stage Strategy
As the data below indicates, Bessemer has leaned towards early- and middle-stage investing based on its deal activity. Currently, the company’s investments in Series A, B, and C funding rounds comprise over 60% of all deals it participates in. Series D and later funding make up about a quarter of deal activity, and over 10% of deals are seed investments. Bessemer’s relatively high proportion of seed and Series A funding implies that it recognizes and invests early in those companies it deems promising but given its fund size, it can continue to invest in companies with breakout potential through their entire life cycle.
While Bessemer has maintained its share of seed deals, its participation in Series A, B, and D funding rounds decreased dramatically in the last year compared to the year prior. The differences are attributable to an increase in the investor’s participation in mid-stage Series C rounds – a four-fold increase year-over-year.
New & Follow-On Trends
Since the second half of 2012, however, Bessemer seems to have found an equilibrium wherein about half of their deals involve new companies and half are to existing companies. New funding comprised between 47% and 61% of deals in each of the last seven quarters, a relatively consistent level compared to the years prior. New funding levels have been especially stable since 2013 Q3, holding at approximately 47% of deals.
Investment Syndicates
Looking at Bessemer’s entire investing history, top co-investing partners of the venture firm include newly rebranded CRV (Charles River Ventures), Columbia Capital and New Enterprise Associates. However, as the trend line shows – all three of the investors have been investing less frequently with Bessemer as of late. More recently, investors including Highland Capital Partners (co-investor in Shopify, 2U, Infinio Systems) and FirstMark Capital (co-investor in Pinterest, Shopify, Knewton) have been more frequent co-investors with BVP. Venrock, Sequoia Capital and Greylock have most frequently invested prior to Bessemer.
Sequoia and Venrock invested in six companies prior to Bessemer, whereas the other feeders invested in five. It’s interesting to note that Bessemer usually follows these investors after funding in Series B rounds or prior, reinforcing our earlier observation of the firm’s lesser participation in late-stage funding rounds.
Notes:
- 100% of the visualizations in this Teardown are from Investor Analytics. No MS Excel necessary.
- The visualizations on CB Insights are all interactive so you can click and see underlying transaction details.
- Visit Bessemer Venture Partners profile to check out these visualizations on your own.
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