Sapphire Ventures Raises $1.7 Billion After Year of Big Exits

(Bloomberg) -- Sapphire Ventures said it has raised $1.7 billion to invest across multiple funds, giving it more than $5.7 billion under management.

Sapphire, based in Palo Alto, California, invests in pre-IPO technology companies, as well as early stage sports and entertainment startups. It also invests as a limited partner directly in other venture firms, including Union Square Ventures and Amplify Partners.

One of its limited partners is SAP SE, which Sapphire was part of until spinning out on its own a decade ago. Some of its other investors include Major League Baseball, Sinclair Broadcast Group Inc. and the owners of the English Premier League team Manchester City.

Two of Sapphire's portfolio companies, JFrog Ltd. and Sumo Logic Inc., went public last year. It was also an investor in Segment Inc., which was acquired by Twilio Inc., and Portworx Inc., which was bought by Pure Storage Inc.

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Like other venture capital firms, Sapphire's portfolio companies have benefited from the enthusiasm for tech stocks. That has also made new investments more costly.

Sapphire Chief Executive Officer Nino Marakovic said current high valuations raise eyebrows. “Could you argue that they're overvalued? Sure,” he said in an interview.

Unlike the dot-com bubble two decades ago, today's startups are more likely to generate sales, Marakovic said, adding that “2000 was all eyeballs, but no revenue.”

Marakovic remains enthusiastic about the industry as well as investing in Silicon Valley, saying that there is still a lot of opportunity in the region, particularly in the enterprise technology category.

“The Valley is still the dominant place,” said Marakovic, noting that “other places are starting to catch up.” He said that Sapphire will also continue to invest in Europe and Israel.

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