Venture capital firm Benchmark is raising $425 million for its eleventh fund, named ‘Benchmark 1,’ according to an investor letter obtained by Forbes. The firm plans to make about 30 early-stage investments from this fund, which is not yet closed. Benchmark’s partners expressed their ambition to build something great in the letter, emphasizing the dawn of a technological era that will revolutionize the industry.
The partners at Benchmark, which include Peter Fenton, Eric Vishria, Chetan Puttagunta, Sarah Tavel, and Victor Lazarte, share the profits evenly regardless of service time. The firm has maintained the same fund size over the years to focus on delivering the highest level of service to its founders and Limited Partners (LPs). Benchmark’s investment pace has varied over the years, with the most recent Fund X being deployed over four years, as reported by Reuters in 2020.
The new fund, Benchmark 1, will focus on AI investments as part of a reset for the generative AI era. The partners are expected to look at AI companies within their areas of concentration such as consumer tech, cloud computing, and crypto. Benchmark has already made several AI investments, including Sierra, 11x, Quilter, Leya, and HeyGen, demonstrating its commitment to the AI sector.
The firm’s unique approach to investing, which focuses on a small, tight-knit partnership of four to six investors, has set Benchmark apart in Silicon Valley. While competitors have raised multi-billion-dollar funds, Benchmark’s method of backing only one or two companies per year has proven highly lucrative. The firm typically takes a significant equity stake in startups and secures a seat on their board of directors.
Benchmark’s generational planning has been deliberate, with partners like Fenton and Vishria remaining with the firm for many years. The departure of some partners, like Miles Grimshaw in 2020, has caused speculation about the future of Benchmark. However, the firm’s partners are focused on executing their unique strategy and continuing to support innovative startups.
As Benchmark raises its eleventh fund, the industry is watching to see how the firm will navigate the evolving technological landscape. With a focus on AI investments and a commitment to delivering exceptional service to its founders and LPs, Benchmark is positioning itself for success in the new era of technology.
