Mayfield Goes To Work With $395M Fund XIII

By Tomio Geron     VentureWire     September 25, 2008

Mayfield Fund has closed its thirteenth fund at its cap of $395 million, continuing the firm's multi-stage strategy across the consumer, enterprise, semiconductor and cleantech sectors.

The target for Mayfield Fund XIII LP was $375 million. The firm's Fund XII closed in 2005 at $375 million.

The larger market crisis has not affected Mayfield's investment strategy or its ability to raise funding, which began a few months ago, said Yogen Dalal, managing director at Mayfield.

"We've always found somehow or other great companies do get created in the worst times - you just don't always know which ones," Dalal said.

But the market has brought some softness to valuations, he added.

"There's some sanity that comes to the marketplace in a market like this, where Series B and C's are not getting ahead of themselves," Dalal said.

As far as limited partners, the new fund has some new LPs as well as many returning ones, he said, though he declined to elaborate.

Several LPs did not return for Mayfield's Fund XII, VentureWire previously reported, due to a disagreement over a clawback payment.

Dalal said the new fund was oversubscribed and has a strong mix of LPs.

More generally, some LPs are nervous about the state of the market, he said. They are exercising caution in their VC allocations, since downturns in the market can cause quick changes in certain asset allocations, Dalal said.

"(But) the large managers of assets are very sensitive to changing percentages and don't want do a 'bang bang' - or cut back - and then later realize they are under-allocated and have to be scrambling to get into funds," Dalal said. "Sometimes LPs aren't increasing their (VC) allocation. They're just happy with where they are."

The new fund closing comes after some recent changes in Mayfield's management. Kevin Fong, a longtime managing director at Mayfield, left the firm, VentureWire reported in February. Two others, David Ladd and Allen Morgan, have moved from managing directors to more limited roles as venture partners in the new fund, as VentureWire previously reported.

Dalal said the changes were a "natural evolution of partnerships," and that Mayfield gives partners flexibility to pursue other interests, noting that Ladd and Morgan are still active with the firm but not in full-time roles.

The company's twelfth fund has invested in 29 companies, including consumer Internet companies Slide Inc., Fixya Inc., Rubicon Project, China-based Qunar.com Information Technology Co. Ltd. and India-based matrimony site Consim Info Pvt. Ltd.; in enterprise-related companies Alfresco Software Inc., Adchemy Inc., Gigya Inc., and telecommunications equipment provider Tejas Networks; and in cleantech and semiconductor company Lattice Power Corp.

The firm expects to invest in about five more companies from Fund XII before beginning to invest from Fund XIII in the first quarter of next year. The new fund will have about the same number of portfolio companies as Fund XII, or about 30 companies at investments of $10 million to $12 million each.

Mayfield has had two relatively quick exits from Fund XII. One was vertical job Web site company Affinity Labs Inc., which raised more than $6 million in a 2006 Series A from Mayfield and Trinity Ventures before selling to Monster Worldwide Inc. for $61 million in cash in January.

The first exit from Fund XII was virtualization company Akimbi Systems Inc., which sold to VMWare in June 2006 for roughly $59 million, after raising about $8 million in a 2005 Series B led by Mayfield with participation from Hummer Winblad Venture Partners and Partech International, according to VentureWire archives.