Benchmark Capital, the storied Silicon Valley VC agency recognized for early investments in eBay, Snap, Uber, and Twitter, is breaking with one in all its signature traditions: maintaining its funds to about $425 million and backing solely younger startups. After greater than 20 years of proscribing its autos to that quantity or decrease, the outfit has closed on commitments of $2 billion throughout two new funds, together with a $1.25 billion automobile devoted to later-stage investments, based on the Wall Avenue Journal.
Whereas the fund sizes of many enterprise capital companies have ballooned into billions of {dollars} during the last decade, Benchmark caught to the technique that helped make it legendary. By being staunchly selective and taking a big—sometimes 20%—stake in each startup the agency backed, it maintained a mannequin designed to maximise outsized returns for its restricted companions.
Nonetheless, Benchmark’s comparatively small fund sizes have probably prevented the agency from investing in capital-intensive AI startups, notably basis mannequin makers, whose spherical sizes typically attain into a whole bunch of hundreds of thousands. In consequence, the agency hasn’t invested in Anthropic, OpenAI, or any of the opposite capital-intensive AI labs, corresponding to Periodic Labs, Reflection AI, or Recursive Superintelligence.
Benchmark’s new $750 million early-stage fund will give the agency extra flexibility to jot down checks in an surroundings the place early-stage valuations have skyrocketed. Whereas the agency has historically backed corporations on the Sequence A stage, Benchmark has not too long ago given itself extra flexibility to spend money on corporations at different early levels of growth.
In current months, Benchmark backed two Sequence B startups: Gumloopa platform that permits enterprises to create AI brokers with out writing code, and Monaco, an AI-native gross sales and CRM platform.
Benchmark common companion Everett Randle beforehand instructed TechCrunch that the agency seems to be to construct a “significant and deep relationship with the entrepreneurs, and that may occur comparatively early within the firm’s lifecycle, at seed, (Sequence) A, at (Sequence) B.”
The agency dipped its toe into late-stage investing when it raised a $225 million particular objective automobile (SPV) to take part in a $1 billion pre-IPO spherical for Cerebras, as TechCrunch reported earlier. Benchmark first led the chipmaker’s Sequence A in 2016. Cerebras held its IPO final month, returning Benchmark $3.25 billion on the IPO worth.
That windfall prompted the agency to lift a devoted progress fund. That new automobile will make 5 to 6 massive investments in each present portfolio corporations and new startups, based on an individual accustomed to Benchmark’s technique.
The 2 new funds aren’t the one adjustments at Benchmark. Over the past two years, the agency has undergone a big shift in its common companions.
In 2024, Miles Grimshaw left the agency to rejoin Thrive Capital. Then, final yr, Sarah Tavel—Benchmark’s first and solely feminine common companion to this point—took on the less-involved position of enterprise companion, whereas Victor Lazarte departed to start out his personal VC agency.
To replenish its ranks, Benchmark — which historically runs with 4 to 6 common companions — added two new high-profile buyers to its crew: Randle, poached from Kleiner Perkins, and Jack Altman, the brother of OpenAI CEO Sam Altman. The strikes counsel that even Benchmark, lengthy outlined by its resistance to progress, now sees the AI period as requiring a special playbook — extra capital, extra levels, and recent blood on the companion desk.
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