We are excited to share the news that Emergence has raised a new fund dedicated to investing in people who change the way the world works. Fund V is a $435 million early-stage fund that will allow us to continue our focus on the enterprise a focus that has led to numerous successful exits as well as investments in industry-leading companies such as Zoom, ServiceMax, Intacct, Blend, Gusto, Bill.com and Textio. Investing in early stage startups gives us the great privilege to partner with the most innovative entrepreneurs, who are changing the way we work today. We are fortunate to have not only made several category-defining early bets in our portfolio, but more importantly to have built lasting partnerships with our entrepreneurs who are leading their companies all the way through to acquisitions, IPOs and beyond.
We started Emergence 15 years ago with the ambitious goal of creating a different venture capital firm by not trying to be everything to everybody. We’ve done this by having conviction in a very specific nascent market: SaaS, which eventually became known as the Cloud. Little did we know that the investment we made in Salesforce back in 2003 would not only become a defining moment for us, but a defining moment for enterprise technology. After Salesforce, we made early investments in SuccessFactors, Intacct, Veeva, ServiceMax, Yammer, Box, Zoom and others. Some would say that we were lucky. We would agree that some luck was involved. But it was not luck that we had the conviction to bet on a business model that others thought would never become mainstream. And look at where we are today. Every company is a Cloud company.
We’re proud of our track record in recognizing and investing in disruptive enterprise technologies – as of today, we have made early stage investments in 9 companies with values that exceed $1 billion each, which is especially noteworthy given the fact that we have made only five to seven new investments per year.
So what’s next?
Before we unveil what we’re working on, it’s important that we reflect upon the funding climate that exists today. We’re now in an era of mega-sized later stage rounds and super-sized funds. And while others choose to raise a lot of capital, we choose to remain true to our original goal of helping enterprise companies in the early stages of their development. To do this well, each of us on the Emergence team has to hold fewer board seats so that we can devote the time and effort required to each of the companies we partner with.
Fund V will continue the work that we started 15 years ago, from Cloud to industry-focused Cloud investments, and more recently in technology for field and remote workers, a thesis we call the “Deskless Workforce.” Our newest focus, on companies that use machine learning to understand similar worker’s behaviors and help the network learn from the most productive habits, is called “Coaching Networks”. We’ve already made early investments in several Coaching Networks companies, including Textio, Chorus.ai, Mya, Guru, and Drishti. These companies, that are in formative stages today, have the potential to dramatically improve human productivity, helping us all stay ahead of the AI wave that is coming. By funding Coaching Networks companies, Emergence isn’t investing simply in entrepreneurs, we’re investing in all workers – making this next software era far more valuable than even the Cloud revolution.
We raised our last fund of $335M three years ago. Much has changed since then, and much has stayed the same. As a firm, we will remain focused on thematic investing by backing companies that change the way the world works. What remains constant is our commitment to the investment model that makes Emergence special – partnering with enterprise startups early and devoting ourselves to helping them become iconic companies.
We are lucky to get the chance to partner with entrepreneurs who are changing the way the world works and to learn from some of the world’s best institutional investors.
Here’s to Fund V!