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NEA Closes $2.6 Billion Venture Capital Fund

In two months, the venture capital firm raised one of the largest venture funds ever.

New Enterprise Associates closed a $2.6 billion venture capital fund on Wednesday, and it’s one of the largest venture funds ever assembled.

"We've seen a lot of liquidity in the last year, and there's really an appetite among the partners to have exposure to this asset class," NEA partner Tom Grossi said.

Approximately 80% of the capital will be deployed in North America, Grossi said, but the firm will be pursuing business opportunities abroad as well. The firm has affiliate offices in India and China, and said it is now looking at possible investments in other countries in Southeast Asia, South America, and Europe.

About half of the money in the fund will be invested in IT companies, a third toward medical technology companies, and the remainder dedicated to energy and an assortment of other sectors, Grossi added. EA also plans to use the money to invest in companies at every stage, from $500,000 seed investments to $50 million growth equity funding.

NEA's new fund comes in the midst of a contracting, more concentrated venture capital market. The largest 10 venture capital firms account for nearly a third of all dollars entering the venture industry, and the industry "has been profoundly transformed in recent years," NEA general partner Peter Barris said in a statement.

"Companies are scaling earlier and faster than ever before in a highly competitive global landscape, and they need partners with a global footprint and deep pockets to succeed," Barris said in a statement.

And NEA certainly has those. The firm raised its latest round--its third consecutive fund of at least $2.5 billion--in only two months, and its total amount of committed capital across all funds is now $13 billion. The largest fund ever raised was $3 billion, raised by Technology Crossover Ventures in 2007, according to the Wall Street Journal.

The firm's last fund was closed in 2009 and totaled $2.5 billion, but that one took seven months of fundraising.

NEA has more than 175 companies in its portfolio, including BuzzFeed, Gilt Groupe, Groupon, and Salesforce.

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Last updated: Jul 25, 2012

JOHN MCDERMOTT | Staff Writer

John McDermott is a business and culture reporter whose work has appeared in the Chicago Tribune and Playboy and on AOL.com. He recently moved from Chicago to Brooklyn, New York, to work for Inc.com.




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