Trinity Ventures closes debut continuation fund amid growing trend in VC

Trinity Ventures closes debut continuation fund amid growing trend in VC

Trinity Ventures has closed its first continuation fund, which carves out 15 assets from a 13-year-old flagship fund, Trinity Ventures XI.

Dubbed Trinity Ventures 2024, the multi-asset continuation vehicle has commitments totaling $435 million and is led by new investor Partners Group and existing investor Portfolio Advisors. The CV is co-led by Goldman Sachs Asset Management.

A Trinity partner was unavailable for comment as of press time. In a statement, general partners Ajay Chopra and Patricia Nakache said, “We are delighted to have closed on a fund that provides a liquidity option to Trinity XI LPs while also extending the life of key Trinity XI investments. We are excited to work with our new and rolling investors as we embark on this next chapter for these portfolio companies.”

The Trinity partners managing the continuation vehicle are “rolling forward the entirety of their capital investment and realized carry in Trinity XI into Trinity Ventures 2024,” Trinity said in the statement.

Continuation vehicles, which are common in the buyouts space, are still relatively rare in venture capital. However, due to an ongoing exit drought, some VCs are turning to CVs as a way to generate liquidity for those LPs that need it.

“I think we will likely see more of the venture continuation vehicles across the venture portfolio because the time to liquidity is not getting shorter,” Brijesh Jeevarathnam, partner and global head of fund investments at Adams Street Partners, told Venture Capital Journal in an earlier report.

Besides Trinity, other VC firms that have launched continuation vehicles include General Catalyst, Lightspeed Venture Partners and New Enterprise Associates.

Trinity XI closed on $328 million in October 2012, including a $25 million commitment from the Sacramento County Employees’ Retirement System, a $20 million commitment from the San Francisco Employees’ Retirement System and a $20 million commitment from financial services conglomerate Mesirow, according to fundraising data from affiliate title Buyouts (registration required).

Trinity XI has achieved a TVPI of 2x and an IRR of 9.8 percent, compared with 11 other vintage 2011 to 2013 venture funds between $250 million and $500 million which achieved a median TVPI of 2.5x and a median IRR of 18.8 percent, according to fund performance data from Buyouts.

Trinity did not disclose the names of all 15 companies that have been rolled into the new vehicle, but said the group includes scaled companies such as BirdEye and Cohesity.

Trinity first invested in enterprise software platform developer BirdEye in its 2016 Series A round, leading the $8 million round as well as co-leading its $25 million Series B round in 2017 alongside World Innovation Lab, according to Crunchbase. The firm first invested in the $55 million Series B round of data management platform developer Cohesity in 2015, also participating in its $90 million Series C round in 2017 and its $250 million Series D round in 2018, Crunchbase reports.

Trinity, which is based in Menlo Park, California, was founded in 1986 by Noel Fenton to invest in the early-stage rounds of technology companies. It  has since amassed an AUM of more than $1 billion across 13 flagship funds.

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