Exclusive: TPG Tech Adjacencies II fund raises $3.4 billion

Today’s topic is fundraising, which has gotten more difficult this year and is taking longer for private equity firms. But sometimes a delay can be a benefit. Consider TPG, which just closed its second Tech Adjacencies fund, or TTAD II, at $3.4 billion. David Trujillo and Nehal Raj, TPG partners, are comanaging partners of TTAD. 

TPG spent nearly two years fundraising for the TTAD II. (Marketing started in early 2021; TTAD II reached its target in 2022 and closed earlier this year, a person familiar with the fundraising said.) The pool invests in tech companies that are opting to stay private longer. That’s pretty much everyone in tech right now. Just two years ago, companies could go public by launching a traditional IPO or merging with a special purpose acquisition company, or, for the big, well-known businesses, using a direct listing. Those options are mostly not available right now. The IPO market, which has served as a funding source for many companies, has been nearly shut since the beginning of 2022. Venture fundraising has also dropped dramatically this year, while valuations across technology have also come down.

This has created a somewhat perfect storm for the TPG Tech Adjacencies fund. “We believe the recent tech slowdown has created the most attractive investing environment for TTAD since its launch in 2018,” said Jon Winkelried, TPG’s CEO, during a conference call to discuss fourth-quarter earnings on Feb. 15.

TPG established the TTAD funds to provide flexible capital to tech companies. TPG TTAD II has invested in Kaseya, an infrastructure software company; personal finance site Acorns; and thatgamecompany, a game studio. TTAD II will provide minority growth investments to companies across the technology sector including software and enterprise technology, as well as internet, digital media, and communications.

“For companies that don’t want to do an IPO, or can’t, and don’t want to test fundraising valuations in this environment, we can do something,” said David Trujillo, head of TPG’s internet, digital media, and communications investing efforts. Raj co-leads TPG’s investments in software and enterprise technology across its private equity platforms.

TTAD is one of several growth funds managed by TPG, which went public in January 2022 and now has $135 billion of assets. TPG was one of the first of the larger private equity firms to launch a growth fund, which makes minority investments and growth buyouts in companies that are at or near profitability. The firm’s first growth fund clocked in at $1.3 billion in 2007. More recently, in 2021, TPG Growth V collected $3.6 billion. 

Read more of my story on TPG’s latest tech growth fund here. 

Until next time,

Luisa Beltran
Twitter: @LuisaRBeltran
Email: [email protected]

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Jackson Fordyce curated the deals section of today’s newsletter.

VENTURE DEALS

- Ohmium International, a Fremont, Calif.-based green hydrogen company, raised $250 million in Series C funding. TPG Rise Climate led the round and was joined by Hanover Technology Investment Management, Energy Transition Ventures, and Fenice Investment Group.

- Virta, a Helsinki-based electric vehicle charging platform, raised €65 million ($71.39 million) in funding. Jolt Capital led the round and was joined by Future Energy Ventures and others.

- Radiant Industries, an El Segundo, Calif.-based portable nuclear reactor development company, raised $40 million in Series B funding. Andreessen Horowitz led the round and was joined by Founders Fund, Decisive Point, McKinley Alaska, Draper Associates, Cantos, and BoostVC. 

- Bobsled, a Los Angeles-based cross-cloud data-sharing platform, raised $17 million in Series A funding funding co-led by Greycroft and Madrona.

- Hydrosat, a Washington, D.C.-based climate tech company, raised $15 million in Series A funding. Statkraft Ventures led the round and was joined by Blue Bear Capital, Hartree Partners, OTB Ventures, Freeflow Ventures, Cultivation Capital, Techstars, Santa Barbara Venture Partners, Expon Capital, and Hemisphere Ventures.

- CarbonChain, a London-based carbon accounting platform, raised $10 million in Series A funding co-led by Union Square Ventures and Voyager Ventures.

- Credora, a New York-based lending infrastructure provider, raised $6 million in funding from S&P Global and Coinbase Ventures. 

- Hakimo, a Menlo Park, Calif.-based security monitoring platform, raised $6 million in funding. Rocketship.vc led the round and was joined by defy.vc, Neotribe Ventures, Firebolt Ventures, and Carrier Ventures.

- Summer, a New York-based student loan repayment platform, raised $6 million in Series A extension funding from General Catalyst and QED.

- Kluster, a London-based B2B SaaS revenue forecasting platform, raised $5 million in Series A funding. Foresight Group led the round and was joined by SuperSeed and other angels. 

PRIVATE EQUITY

- BPEA EQT and its portfolio company Nord Anglia Education agreed to acquire IMG Academy, a Bradenton, Fla.-based sports education school, from Endeavor Group Holdings. The deal is valued at $1.25 billion. 

- Clearview Capital acquired a majority stake in Capitol Services, an Austin-based legal and compliance services provider. Financial terms were not disclosed. 

- MiddleGround Capital acquired Advantage Metal Products, a Livermore, Calif.-based high-precision metal products provider. Financial terms were not disclosed. 

- OCU Group Limited, a Triton V portfolio company, agreed to acquire the Northavon Group, a Radstock, U.K.-based construction, infrastructure, and engineering group.

- Vista Equity Partners acquired a minority stake in Benchmark Gensuite, a Mason, Ohio-based digital transformation software platform. Financial terms were not disclosed. 

OTHER

- Zinnia, backed by Eldridge, agreed to acquire Policygenius, a New York-based digital insurance marketplace. Financial terms were not disclosed.

FUNDS + FUNDS OF FUNDS

- ​​Solum Partners, a Boston-based investment management firm, raised $850 million for a fund focused on the food and agriculture industry. 

PEOPLE

- Base10, a San Francisco-based venture capital firm, promoted Luci Fonseca to partner.

- Citation Capital, a Dallas-based private equity firm, hired Daniel Baginski as CFO. Formerly, he was with TowerBrook Capital Partners.

- Commerce Ventures, a San Francisco-based venture capital firm, promoted Vivek Krishnamurthy to partner.

- M13, a Santa Monica, Calif.-based venture capital, hired Win Chevapravatdumrong as a partner. Formerly, he was with Masterclass.