Kleiner Perkins is one of Silicon Valley’s storied firms having invested in companies like Google, Intuit and Juniper Networks among others. While the firm has not had a string of hits of the magnitude it once had, it remains a very active investor and based on some recent data, the firm appears to be getting its mojo back.
In this Kleiner Perkins teardown, we wanted to dissect the firm in a data-driven way using CB Insights’ Investor Analytics visualizations. Specifically, this teardown will dive into the following aspects of Kleiner Perkins:
- Deal/funding activity
- Exit activity
- Fundraising history
- Notable people
- Industry & geography shifts
- Financing trends
- Stage-wise funding patterns
- New & follow-on trends
- Investment syndicates
Funding Activity – Averaging over 8 investments per month
Kleiner Perkins is a consistently active multi-sector venture investor financing companies across green tech, IT, and life sciences. Over the past 18 months the VC has averaged participation in 8.4 funding deals per month with a median deal size of $32M. Kleiner Perkins recently participated in Uber’s mega financing (the June spike you see in the graph above) and has also taken part in several other megarounds since 2013:
- InsideSales.com – the Utah-based cloud sales acceleration platform took in $100M in its Series C funding round. Key investors included Kleiner Perkins and US Ventures Partners.
- One Kings Lane – a flash sales site for the home market, offering members access to designer home decor, furnishings, accessories, and gifts at discounted prices. The startup received a huge bump in financing in its $112M Series E round last January. Notably, the company recently announced it will be laying-off up to 20% of its staff. Whether this cut was due to a typical cost cutting effort or a larger fundamental business model issue is not clear.
- eRecyclingCorps – the bulk-recycling firm raised $105M in its Series C round last October. Kleiner Perkins has been a long-time investor in eRecyclingCorps, having participated in three deals for the company since 2011.
Overall, Kleiner, while active, has stayed fairly consistent with the number of deals it does per year. The deal activity has grown a modest 5% year-over-year.
Exit Activity – A Recent Explosion
Kleiner Perkins has seen a major uptick in exits since the start of 2013, as seen by the recent cluster in the scatter above. The firm’s portfolio has seen 47 exits in the last 18 months, including 36 acquisitions and 11 IPOs. Not only has the VC’s exit volume gone up dramatically, but so has the average exit valuation. The company’s most recent slew of exits (since 2013) with disclosed dollar figures were all valued at over $100M. Some of the most noteworthy include:
- Twitter - the online social media giant raised over $14B in its initial public offering last November. Kleiner Perkins was a later investor in the company, participating in its Series E & F rounds in 2010.
- Nest Labs – Google acquired the smart-thermostat maker in February for $3.2B, after its venture arm (Google Ventures) invested in the smart home company. Kleiner Perkins invested in Nest’s Series B round in 2011.
- Chegg - the online learning platform and used-textbook retailer went public last year, at a valuation of over $1B. Kleiner Perkins was a frequent investor in Chegg, involved in three of its funding deals since Series C in 2008.
Fundraising History – Recent Hiatus, But More To Come
Kleiner Perkins has historically raised large dollar amounts in its investment funds, with many exceeding the $500M mark. But our data (table above) shows the firm hasn’t raised in over 2 years. After raising over $4B between 2009 and 2012 across its XI-XV, Green Growth, sFund, and Digital Growth funds, Kleiner Perkins hasn’t raised a new fund. However, according to Partner John Doerr, the firm is hoping to raise approximately $1.2B for new funds later in the year, including $450M towards its sixteenth fund and $750M for a second Digital Growth fund.
Notable People – The Investment Legends of KPCB
Here’s a shortlist of some of the important faces at Kleiner Perkins.
John Doerr is one of the most recognized names in venture capital, and with good reason; some of his exited companies include Google, Amazon, Symantec, Zynga, and Twitter (for which he led Kleiner Perkins’ investment). His current portfolio includes the likes of Square, Coursera, Indiegogo, and Uber, and he currently sits on the boards of many of his exited/unexited firms including Google, Flipboard, and Zynga (part of Doerr’s board listings are above).
Ted Schlein has been with Kleiner Perkins since 1996 and focuses on early-stage technology companies in enterprise software and infrastructure. He is one of the most connected venture capitalists as we’d previously highlighted. The former National Venture Capital Association chair, he’s led Kleiner Perkins’ successful investments in Mandiant, Chegg, LifeLock, Curio, Oakley Networks, and more. Schlein serves on the boards of many portfolio companies including 3VR, Chegg, and Ionic Security, and shares boards with Thomas Noonan (TechOperators), Tom Mawhinney (JAFCO Ventures), and David Cowan (Bessemer VP), to name a few (shared boards table above).
Trae Vassallo is a partner at Kleiner Perkins and focuses on the consumer, software, and digital energy markets. Before starting with the firm, Vassallo founded the enterprise email service Good Technology that was later acquired by Motorola. She led Kleiner Perkins’ investments in Aggregate Knowledge, Dropcam, and Recyclebank and worked very closely with Nest Labs before its acquisition. She shares boards with Sameer Gandhi (Accel Partners), David Whorton (Tugboat Ventures), and Joshua Nelson (Thomas Lee Partners). After being cut from KPCB’s investment committee late last year, Vassallo is rumored to be planning her next move.
Bing Gordon leads Kleiner Perkins’ ProductWorks, aiming to match talent to ventures in need, and the firm’s $50M sFund, which is focused on ventures involved in the social web. He serves on the boards of Amazon, Zazzle, and Zynga and shares board positions with John Doerr (KPCB) and K. Ram Shriram (Sherpalo Ventures). Gordon was also founding director at Katango, ngmoco, and Audible, all now acquired.
Industry & Geography Shifts – Internet companies take the lion’s share
While the internet, clean/greentech/energy and life science industries continue to be emphasized by Kleiner Perkins’, the firm has seen some shifts in funding and deal allocation between the industries it is focused on when we compare the time between 2010-2011 and 2012-2013. In the heatmaps below, block size represents deal count while color represents total funding in the indicated quarters. (darker blue = more funding)
Internet-related ventures received approximately the same proportion of funding in each period, but KPCB’s deal activity increased 58% in the more recent period. Kleiner continues to follow-on in some of its clean tech bets but it has de-emphasized the area a bit after some notable failures and general declining market sentiment on the space. That said, companies like Nest are green tech and provided a good outcome for Kleiner although folks may be reticent to call them green tech given the feelings the term sometimes evokes.
Geographically, there have not been big moves in Kleiner Perkins’ behavior with worldwide funding and deal allocation largely stable in the last four years. North American ventures accounted for 91% of deal activity in 2012-13 compared to 90% of deal activity in 2010-11. Within the United States, California continued to comprise 70% of deal activity over both periods.
Financing Trends – No Major Shifts
Over the past five years, the median deal sizes in which Kleiner Perkins participates has stayed relatively consistent but has trended up for the last several quarters. The average round size has stayed relatively consistent but of course is more prone to wild swings if Kleiner participates in a handful of mega deals. For example, the 2011 Q1 average figure is the obvious outlier, elevated due to large funding rounds to Zynga and Groupon that together raised almost $800M.
Investment Stage Analysis – Almost 1/4 of investments at early stage
Kleiner Perkins was historically considered the firm that could see around corners and recognize great companies early-on. The data for the firm over the last two years show the firm remains active at the early stage with over 23% at the seed/series A stage, but the seed stage has seen materially less volume. Interestingly, half of Kleiner’s financing activity has taken place in Series B and C rounds more recently. Kleiner Perkins has definitely established the mid-stage rounds as its comfort zone and many of the firm’s recent exits were in firms the firm entered at this stage.
The graphic below illustrates Kleiner’s round by round statistics and metrics.
New & Follow-On Trends – Fewer new investments more recently
With the firm’s last funds being raised two plus years ago, it is perhaps not surprising that about 60% plus of the firm’s investments have been follow-on investments into existing portfolio companies. New investments made up the majority of deals in only six of the previous twenty quarters.
Investment Syndicates – Accel Is Top Feeder, DAG Is Top Coinvestor
Kleiner Perkins’ sees the most companies it invests in come from Accel Partners, SV Angel, and Union Square Ventures.
According to the Kleiner investment syndicate dashboard, the firms’ top coinvestors were DAG Ventures, Integral Capital Partners, and New Enterprise Associates. DAG Ventures which is considered a “coattail fund” has invested in the most companies alongside Kleiner.
It’s interesting to note that while Kleiner Perkins usually coinvests with other large firms at the Series B stage or later, it has participated in seed funding rounds with NEA and Google Ventures in the past.
All of the data visualizations in this brief are directly copy/pasted from Investor Analytics. No excel necessary. All visualizations are interactive online allowing you to see the underlying company financing or exit information just by clicking as wel. Create an account below if you’d like to try it out.