Benchmark Capital, the storied Silicon Valley venture capital firm known for its early investments in eBay, Snap, Uber and Twitter, is breaking with one of its signature traditions: keeping its funding at around $425 million and backing only young companies. After more than two decades of restricting its vehicles to that amount or less, the team has closed $2 billion in commitments to two new funds, including a $1.25 billion vehicle dedicated to later-stage investments, according to the Wall Street Journal.
While the size of many venture capital firms’ funds has ballooned into the billions of dollars over the past decade, Benchmark stuck to the strategy that helped make it legendary. By being staunchly selective and taking a large stake (typically 20%) in every startup he backed, he maintained a model designed to maximize outsized returns for his limited partners.
However, the relatively small size of Benchmark’s funds has likely prevented the firm from investing in capital-intensive AI startups, particularly base model makers, whose round sizes often reach into the hundreds of millions. As a result, the company has not invested in Anthropic, OpenAI, or any of the other capital-intensive AI labs, such as Periodic Labs, Reflection AI, or Recursive superintelligence.
When Benchmark has placed bets on AI, the results have been mixed. The company led a $75 million round in Manus, a Singapore-based AI agent platform that reached $100 million in annual recurring revenue within eight months of launch. when goal agreed to acquire Manus for roughly $2 billion late last year, it looked like another Benchmark winner in the making. But Chinese regulators, arguing that the company, founded in China before moving to Singapore, had violated export control laws, blocked the deal in April, leaving Benchmark’s involvement in limbo.
Benchmark’s new $750 million seed investment fund will give the company more flexibility to write checks in an environment where initial valuations have soared. 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: rubber loopa platform that allows companies to create AI agents without writing code, and Monaco, a native AI sales and CRM platform.
Benchmark general partner Everett Randle previously told TechCrunch that the company is looking to build a “deep, meaningful relationship with entrepreneurs, and that can happen relatively early in the life cycle of the company, in seed, (Series) A, in (Series) B.”
The company 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. previously reported. Benchmark first led the chipmaker’s Series A in 2016. Cerebras held its initial public offering last month, returning to Benchmark. 3.25 billion dollars at the IPO price.
That windfall led the company to raise a dedicated growth fund. That new vehicle will make five to six large investments in both existing portfolio companies and startups, according to a person familiar with Benchmark’s strategy.
The two new funds are not the only changes to Benchmark. Over the past two years, the firm has seen a significant change in its general partners.
In 2024, Miles Grimshaw left the company to rejoin Thrive Capital. Then last year, Sara 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 your own venture capital company.
To replenish its ranks, Benchmark, which traditionally has between four and six general partners, added two new high-profile investors to its team: Randle, poached from Kleiner Perkins, and Jack Altman, 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.
When you purchase through links in our articles, we may earn a small commission. This does not affect our editorial independence.
