Bessemer Venture Partners raised $4.6B for two new funds in August: $3.85B for young startups, the firm's biggest fund to date, and $780M for PE buyouts
Venture capitalists aren't striking many deals with tech founders these days. Initial public offerings are nonexistent and public tech stocks … Tweets: @kateclarktweets , @jessicalessin , @dbhurley , @ohitsstuart , @yuris , and @danprimack Tweets: Kate Clark / @kateclarktweets : Exclusive: Bessemer Venture Partners raises $3.85 billion for its biggest fund yet, plus $780 million for its first ever private equity buyout fund. https://www.theinformation.com/ ... Jessica Lessin / @jessicalessin : I feel this way about a lot of things right now. “If you were a monkey investing in the tech market over the last 10 years and you didn't have good returns, then shame on you. ... Now we are going to start to see who's actually really good at this.” https://www.theinformation.com/ ... @dbhurley : And the inflows continue. Everyone looks at the TVL, more people should be looking at inflow of venture capital into the space at large. Bear market? Not in dev. https://twitter.com/... Stuart W / @ohitsstuart : it's funny to read stuff like this and also read the like somber posts from VCs about “flight to quality” and “more discipline.” How long can you sit on this much dry power until the definition of “quality” starts to look pretty malleable https://twitter.com/... Yuri Sagalov / @yuris : You have to wonder what LPs are thinking when they see “anymore.” https://www.theinformation.com/ ... Dan Primack / @danprimack : “Anymore” https://twitter.com/...
Context & Ripple Effects
Bessemer is raising its largest fund ever into a market where IPOs have gone quiet and public tech stocks have fallen — a reversal from 2021, when non-VC funds took part in a record 42% of tech startup deals and US funding was on pace to double 2020's total. A Newcomer profile last year framed Bessemer as an early backer of Twilio and Shopify now fighting Andreessen Horowitz, Tiger Global, and SoftBank for allocation in hot rounds.
The new structure matters as much as the size: alongside the $3.85B early-stage vehicle sits a first-ever $780M private equity buyout fund, a bet that falling valuations are opening later-stage territory that venture firms historically left to buyout shops.
First-order effects
- Limited partners are committing record sums to Bessemer precisely when deal activity has slowed, giving the firm more dry powder per deal than at any point in its history while founders see fewer competing term sheets.
- The $780M buyout fund moves Bessemer directly into later-stage control deals, a category it previously ceded to traditional private equity.
Second-order effects
- Rivals named in the coverage — Andreessen Horowitz, Tiger Global, SoftBank — face pressure to match both the fund size and the stage expansion, extending the arms race for LP capital beyond seed and growth rounds.
- Buyout firms now compete with a venture brand for discounted late-stage tech assets, likely tightening bidding on the very companies whose public-market comps drove prices down.
Third-order effects
- If large franchises keep adding buyout vehicles while smaller managers struggle, venture consolidates around multi-stage giants — echoing the post-2013 proliferation of new funds tracked by Dow Jones VentureSource, when firms raised $44B in 2016, the most since the dot-com crash.
- The boundary between venture and private equity blurs structurally: the same firm can own a company from incorporation through a take-private, changing how founders and LPs evaluate 'stage specialists.'
The trend: Top-tier venture firms are responding to the exit drought by raising ever-bigger flagship funds and pushing into buyouts, concentrating LP capital in fewer, larger multi-stage platforms.