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Accel Raises New Funds

Many VCs are struggling to retain investors, but Accel Partners has bucked that trend, announcing Thursday the closing of two new funds worth more than $1 billion. The first, called Accel London III, contains $525 million and will be used to fund European-based startups. The second, called Accel Growth, will be managed in Palo Alto and contains $480 million for "growth equity."

Accel's Jim Breyer tells Kara Swisher that raising the money was easier than he thought. "It wasn't difficult, simply because we are fortunate to have exceptional investors, who stepped up aggressively over the last month," said Breyer. "Despite the times, I think we are going into an exceptional investing environment, as long as we value based on a more reasonable but aggressive set of upside scenarios."

Theresia Gouw Ranzetta, another Accel partner, told The New York Times that companies needed the money to sustain growth, but also for use as a cushion in these tough economic times. Silicon Alley Insider guesses that Facebook, which is already part of Accel's portfolio of investments, could use just such a cushion. "Facebook needs cash and soon as revenues continue to miss expectations," Nicholas Carlson says, noting that the company recently admitted trying to raise money at the same lofty $15 billion valuation at which Microsoft purchased a 1.6% stake last year. "Basically, Facebook needs a hero. And it's gotta be soon."

Read the whole story at D: All Things Digital/Silicon Alley Insider »

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