Benchmark raises its first-ever growth fund

Benchmark Capital, the storied Silicon Valley VC firm known for early investments in eBay, Snap, Uber, and Twitter, is breaking with one of its signature traditions: keeping its funds to about $425 million and backing only young startups. After more than two decades of restricting its vehicles to that amount or lower, the outfit has closed on commitments of $2 billion across two new funds, including a $1.25 billion vehicle dedicated to later-stage investments, according to the Wall Street Journal.

While the fund sizes of many venture capital firms have ballooned into billions of dollars over the last decade, Benchmark stuck to the strategy that helped make it legendary. By being staunchly selective and taking a large—typically 20%—stake in every startup the firm backed, it maintained a model designed to maximize outsized returns for its limited partners.

However, Benchmark’s relatively small fund sizes have likely prevented the firm from investing in capital-intensive AI startups, particularly foundation model makers, whose round sizes often reach into hundreds of millions. As a result, the firm hasn’t invested in Anthropic, OpenAI, or any of the other capital-intensive AI labs, such as Periodic Labs, Reflection AI, or Recursive Superintelligence.

Where Benchmark has placed AI bets, the results have been mixed. The firm led a $75 million round in Manus, a Singapore-based AI agent platform that hit $100 million in annual recurring revenue within eight months of launching. When Meta agreed to acquire Manus for roughly $2 billion late last year, it looked like another Benchmark winner in the making. But Chinese regulators — arguing the company, which was founded in China before relocating to Singapore, had violated export control laws — blocked the deal in April, leaving Benchmark’s stake in limbo.

Benchmark’s new $750 million early-stage fund will give the firm more flexibility to write checks in an environment where early-stage valuations have skyrocketed. While the firm has traditionally backed companies at the Series A stage, Benchmark has recently given itself more flexibility to invest in companies at other early stages of development.

In recent months, Benchmark backed two Series B startups: Gumloop, a platform that allows enterprises to create AI agents without writing code, and Monaco, an AI-native sales and CRM platform.

Benchmark general partner Everett Randle previously told TechCrunch that the firm looks to build a “meaningful and deep relationship with the entrepreneurs, and that can happen relatively early in the company’s lifecycle, at seed, [Series] A, at [Series] B.”

The firm dipped its toe into late-stage investing when it raised a $225 million special purpose vehicle (SPV) to participate in a $1 billion pre-IPO round for Cerebras, as TechCrunch reported earlier. Benchmark first led the chipmaker’s Series A in 2016. Cerebras held its IPO last month, returning Benchmark $3.25 billion at the IPO price.

That windfall prompted the firm to raise a dedicated growth fund. That new vehicle will make five to six large investments in both existing portfolio companies and new startups, according to a person familiar with Benchmark’s strategy.

The two new funds aren’t the only changes at Benchmark. Over the last two years, the firm has undergone a significant shift in its general partners.

In 2024, Miles Grimshaw left the firm to rejoin Thrive Capital. Then, last year, Sarah Tavel—Benchmark’s first and only female general partner to date—took on the less-involved role of venture partner, while Victor Lazarte departed to start his own VC firm.

To replenish its ranks, Benchmark — which traditionally runs with four to six general partners — added two new high-profile investors to its team: Randle, poached from Kleiner Perkins, and Jack Altman, the brother of OpenAI CEO Sam Altman. The moves suggest that even Benchmark, long defined by its resistance to growth, now sees the AI era as requiring a different playbook — more capital, more stages, and fresh blood at the partner table.

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