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KKR has raised $711 million for a new growth equity technology fund called Next Generation Technology Growth Fund, which will seek deals in the $100 million range. A few notes based on a back-and-forth with David Welsh, the partner leading the effort who joined KKR in October from Adams Street Partners:
- The fund will be doing deals for tech companies in the “scaling” stage. Meaning, their technology is proven and they’re already disrupting legacy competitors. “The goal is simple: enterprise building,” Welsh says.
- KKR will occasionally use a small amount of debt in these deals.
- The fund has already done four deals: data analytics company Optimal+, travel booking site GetyourGuide, data integration startup Jitterbit and cybersecurity company Darktrace. Several of KKR’s best-known startup deals – Cylance, Magic Leap, Fanduel – were done outside of the fund.
- KKR’s selling point to startups is its network of portfolio companies. For example, KKR helped GoDaddy (GDDY), which made two acquisitions this week, identify M&A targets and expand internationally. It’s not unlike the VC firms that foster community among their portfolio companies… except much, much bigger: KKR’s 100 portfolio companies spend $7 billion on IT and $10 billion on marketing each year.
