Three years after announcing its sixth fund, OpenView Venture Partners is back with a new fund, its seventh, which has secured $570 million in capital commitments. This represents a 25% increase over the firm’s previous record of $450 million raised for its sixth fund. The Boston-based venture capital firm had initially announced its intention to raise this fund in January 2022 and had already secured commitments worth $517 million as of September last year.
A Look at OpenView Venture Partners
OpenView Venture Partners has been a leading player in the venture capital space, with a focus on high-growth software startups. The firm invests globally across various business software categories, including infrastructure, applications, cybersecurity, and vertical software. With this new fund, OpenView will continue to focus on these areas, looking for companies that have the potential to scale rapidly.
Mackey Craven on Fundraising in a Challenging Market
When asked about fundraising in today’s economic climate, Mackey Craven, partner at OpenView Venture Partners, acknowledged that it has become more challenging. However, he noted that the firm’s core partners have worked together for over a decade and have a strong set of supportive limited partners who are receptive to getting involved in another fund.
OpenView’s Investment Strategy
OpenView invests in companies with between $1 million and $10 million in annual recurring revenue (ARR). The firm looks for businesses that have the potential to scale rapidly, with a focus on product-led growth. According to Poyar, OpenView coined the term "product-led growth" in 2016 because of trends they were seeing in the software market.
Themes for Future Investments
OpenView is looking at domain-specific applications of machine intelligence and software around integrations, automation, and workflow. The firm believes that vertical software and product-led growth are two key themes that will continue to drive investments.
Vertical Software: An Underserved Market
According to Poyar, there’s a lot of people who need software but don’t have great solutions because the market has historically been underserved by software players. OpenView sees an opportunity to invest in vertical software companies that can provide tailored solutions to specific industries.
Product-Led Growth: A Key Driver for Future Investments
Poyar noted that product-led growth is a key driver for future investments. By building products that customers love, businesses are growing more efficiently and effectively than their peers.
The Sky Isn’t Falling for Cloud Software Spend
Despite concerns about the impact of the current economic climate on cloud software spend, OpenView remains optimistic. The firm believes that there will continue to be opportunities for growth in this space.
Conclusion
OpenView Venture Partners’ new fund is a significant milestone for the firm and a testament to its commitment to supporting high-growth software startups. With $570 million in capital commitments, OpenView is well-positioned to continue investing in areas such as vertical software and product-led growth. As the market continues to evolve, it will be interesting to see how OpenView adapts its investment strategy to capitalize on emerging trends.
