CRV – Fund XVI

Charles River Ventures, now rebranded as CRV, just raised a $393M fund to target early stage companies. The fund will be its sixteenth and will be appropriately named Charles River Partnership XVI. We looked at CB Insights data surrounding CRV with an eye to see what it’s recent strategy might portend for this next fund.

CRV has been a prolific investor over the past few years, with the fund averaging just under 40 deals per year since 2010. Despite the high average, a slower pace in 2013 may be the new normal, as CRV is on pace to have less than 30 deals for the second straight year in 2014. With the new fund, we’ll be looking to see if investment activity picks up again.

CRV focused primarily on California and Massachusetts

CRV’s investments remain centered in California, with the fund completing over 50% of its deals in the Golden State over the past 3 years and over 57% in the past year. Massachusetts garnered the second most deals, with nearly 1/4 of all investments, as well as the highest average and median deal size of any geo. Some of the larger rounds that CRV has participated in within Massachusetts recently include the $58M Series C investment in database company SimpliVity, and two investment rounds totaling $103M in mobile data storage company Affirmed Networks.

On a first investment basis, CRV, despite its original Boston roots, has largely invested within California since 2009. With its announcement of the latest fund, the Partner John Auerback said this:

“The West Coast is where the center of gravity for technology and investing, especially in consumer, mobile and cloud computing, has clearly shifted…Over the past 12 years, we’ve taken our rich East Coast history from our office next door to MIT and gone West.”

As the data shows, CRV truly has gone West.

CRV new vs. follow-on investment pace

CRV is an early-stage investor with 58% of all deals being either Seed or Series A investments. Having said that, they do have a sizable portion of mid and late-stage deals, which is mostly the result of the fund following-on to its early-stage investments. Notable follow-ons include Yammer, which CRV entered at the Series A and followed-on through to the Series E before its exit to Microsoft, as well as Zendesk, which the company invested in from Series A to D.  With the new fund, the proportion of new investments may increase in the near-term but given history, they’ll maintain reserves to invest through a firm’s stages of maturity.

Charles River Ventures industry focus – mobile and internet

Since 2012, the Internet and Mobile Software & Services industries have garnered the most investments of any industries from CRV. Specifically within the Internet Software and Services space, CRV has closed over five Customer Relationship Management deals including participation in two financing rounds for both Crushpath Systems and Jetlore.

When looking at the past four quarters versus the same time period a year before (Q3’12-Q2’13) investments into internet have dropped off to just 36% (versus 53% previously), as eCommerce deal volume has bumped up including a May 2014 Series A investment in DoorDash, a startup in the hot “Uber for X” category. The chart below highlights the top sub-industries within Internet and mobile software & services where CRV has invested in the last two years.

CRV exits

CRV has had 25 exits since 2012. Notable exits include Twitter’s IPO which valued them at $14.2B, Yammer’s $1.2B acquisition by Microsoft, and Millennial Media’s IPO which valued them at $973.5M initially. As we previously mentioned, CRV tends to follow-on to their winners, so keep an eye out for the funds’ later-stage investments which CRV continues to invest in for potential IPO pipeline companies moving forward.

All of the data in this brief is right from CB Insights and visualizations are from Investor Analytics. Online, all visualizations are interactive allowing you to see the underlying company financing or exit information just by clicking. Create an account below if you’d like to try it out.