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Bain Capital Ventures raises $600 million (and another big fund is born)

It’s starting to happen like clockwork.

Firms that raised money in 2014 are hitting up LPs almost two years to the date from their last fund closing. The newest example? Bain Capital Ventures, which this morning announced a new, $600 million fund.

It last closed two funds — a $650 million early-stage vehicle, and a $200 million co-investment fund to back maturing Bain Capital Ventures’s investments — two Junes ago. (Others that’ve closed fast follow-on funds this year include Accel Partners, Andreessen Horowitz, Founders Fund, Lightspeed Venture Partners, Battery Ventures, Kleiner Perkins Caufield & Byers, and General Catalyst Partners.)

Bain Capital Ventures is the venture arm of the private equity behemoth Bain Capital, which was founded in 1984. The 15-year-old unit opened its first Bay Area office five years ago, planting a flag in Palo Alto; soon, it’s moving into an even bigger office in San Francisco.

It has eight managing directors — including Ajay Agarwal, who leads its West Coast team — and one partner. According to Agarwal, who joined Bain Capital Ventures 13 years ago, it used to be that “90 percent of our team was on the East Coast, in Boston and New York, and 10 percent was here, but it’s about 50/50 at this point.”

Bain Capital Ventures primarily backs enterprise-focused software companies, though it invests “opportunistically,” says Agarwal, in consumer-facing businesses, too. (Two examples:  Rent the Runway and Jet.com, whose founders Bain’s team had gotten to know earlier in their careers.)

The firm says that half of what it does is early stage and the other half is growth stage. It also says it’s run very separately from Bain Capital, though Agarwal has told us before that “those connections into companies [from Bain’s broader network] is massive.” When the robotics company Kiva had “six terms sheets and was trying to determine who to pick, we introduced the company to the head of distribution at Staples,” which helped seal the deal.

Bain’s newest early-stage fund is slightly smaller than its last; asked about that, the firm says it targeted what it thinks is the “appropriate fund size for our strategy in the current market environment.”

Asked what it didn’t raise another co-investment vehicle this time around, it said it still has capital to deploy from that $200 million fund it closed it 2014. It also said it isn’t quite done investing its previous early-stage fund, either.

Like a lot of firms to announce new funds recently, Bain Capital apparently decided to get ahead of the growing number of venture firms in the queue by talking with its investors well before it had committed its entire fund.

As notes on institutional investor at a university endowment with whom we spoke recently, “Every one of our GPs has come back in the last 12 months, with the exception of one guy. VCs are accelerating their fundraising partly because they have nice marks and want to get ahead of any market cyclicality” —  read, downturn. “Partly, too, they see their GP brethren coming in and they know that [the institutional investors who fund venture firms] only have so many dollars. And you want to be at the front of the queue, not the back of it.”

Bain hasn’t exited from any of the investments it has made with its 2014 fund, nor from the $600 million fund it closed in 2012. But it has seen numerous exits, including from a $467 million fund that it closed in 2009. These include Boston Heart Diagnostics, a company that sold for $140 million in 2014; Liazon, a private benefits exchange that sold to the professional services firm Towers Watson in 2013 for undisclosed terms; and the digital ad platform TellApart, which sold to Twitter for about $533 million last year.

Other companies in its portfolio include Optimizely, BillTrust, DocuSign, and SurveyMonkey.

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