The $213.2B Washington State Investment Board is betting on venture capital with a commitment of $400M to the bucket.
According to meeting materials from its September investment advisory committee, the investment board made two commitments of up to $175M to Menlo Ventures XVII, an early-stage venture capital fund and $225M to Menlo Inflection IV, a late-stage venture capital fund.
Menlo Ventures was founded in 1976 and focuses on technology investments across seed through growth stages in sectors including consumer internet, mobile, communications infrastructure, enterprise, security, and storage. The fund expects to invest between $8M to $15M of equity (approximately a 15-20% ownership stake) in 30 to 40 seed and early-stage companies.
According to the meeting materials, Fund IV will collaborate with early-stage Menlo Ventures funds to identify late-stage venture investment opportunities, including high-performing current portfolio companies and category leaders in areas such as artificial intelligence, bio/health care, and consumer technology, which have lower risk profiles and a shorter investment horizon than early-stage venture capital investments.
Menlo Ventures is the WSIB’s longest-standing private equity relationship, according to the meeting materials. Since 1981, the Board has committed over $1.8B across 17 Menlo Ventures funds, including a $225M commitment to Menlo Ventures XVI in 2023.
Previously, the pension plan committed up to $1.5B in total to two funds focused on buyout and growth equity – Advent International GPE XI and Evergreen Park Investment Fund. Founded in 1984, Advent International focuses on investments in international buyouts, growth, and strategic restructuring across sectors such as industrial, business and financial services, health care, retail, consumer, and technology.
As of Dec. 31, 2024, the WSIB had allocated 28.9% to its private equity sleeve. Within the private equity portfolio, venture capital and growth equity held 12.4%, as of June 30, 2024.
Russell Investments in a recent report, citing data from Pitchbook, spoke about how the ratio of demand to supply for venture capital funding spiked in 2023 and remains elevated relative to much of the 2010s and early 2020s, suggesting that supply-side scarcity could support valuations going forward.
“Venture capital markets are at an attractive entry point for long term investors,” added the report. “Demand remains strong, driven by transformative trends in AI, climate tech, and fintech.”
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