Technology Crossover Ventures, the investment firm that backed Go Daddy Group Inc. and Netflix Inc., is seeking $2.5 billion for its next fund, according to two people familiar with the matter.
TCV VIII LP is targeting less than the $3 billion the firm’s previous fund raised in 2007, said the people, who asked not to be identified because the information isn’t public.
Venture firms are marketing funds even after Facebook Inc. (FB:US)’s poorly received initial public offering and the European debt crisis disrupted the best string of Internet IPOs in more than a decade. Institutional Venture Partners raised $1 billion for its latest venture capital fund, the firm said in June, shortly after Madrona Venture Group amassed a $300 million fund.
Rebecca Hurst, a spokeswoman for Palo Alto, California- based TCV, declined to comment. Park Hill Group, the placement- agent arm of Blackstone Group LP, is helping to market the fund.
TCV makes late-stage investments in such areas of technology as Internet, financial services, infrastructure, communications and software. It also backs public companies. The firm is able to invest $20 million to $200 million in companies, according to its website.
As it pitches its next fund, the firm can point to recent exits. It backed ExactTarget Inc., the e-mail marketing company that counts Microsoft Corp. and Groupon Inc. as customers, which went public in March. The firm scored a gain last year on the IPO of HomeAway Inc., a vacation-rental website. TCV agreed to sell its stake in FX Alliance Inc., a provider of electronic foreign-exchange services, to Thomson Reuters Corp., the companies said today.
The firm’s prior fund, TCV VII, was generating 1.2 times capital and a 14 percent internal rate of return as of March 31, the people said. The firm has produced a 1.4 multiple and 15 percent net internal rate of return since it was founded in 1995 by Jay Hoag and Rick Kimball.
In July 2011, it teamed with Silver Lake Management LLC and KKR & Co. to purchase a majority stake in Go Daddy, a website registration and hosting company. The firm in November agreed to buy $200 million in zero-coupon senior convertible notes due in 2018 from Netflix, the video-streaming and DVD subscription service.
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