Accel Partners’ Extraordinary 2005 Fund IX
In 2005 Accel Partners closed its $440 million Accel 9 Fund. That fund may not go down in history as the most profitable venture fund ever, but it will certainly be one to remember. Why? Facebook, for the most part. It is a stunning turnaround for a firm that many whispered was pretty much done earlier in the decade.
In 2005 Accel invested a small part of that fund – just $12.7 million – in Facebook. In exchange they got 11% of the company, and a lot of derision around Silicon Valley for paying such a ridiculously high valuation for the fledgling startup.
Fast forward to today, though, and no one’s laughing any more. The firm sold part of that investment, less than 20%, at a $35 billion valuation. That brought in half a billion dollars or so in cash, paying back the entire capital base of the fund in one transaction.
When Google went public in 2004 it was then valued at $27 billion, Making Sequoia and Kleiner Perkins, with around 10% ownership each, very happy. Accel just beat that in a private sale. And the value of the remaining 8% or so of the company they own is worth around $3 billion at that valuation. All from a $12.7 million investment.
And that’s not the only winner in that fund. Fund IX also invested in Admob (sold to Google for $750 Million), Xensource (acquired by Citrix for $500 million) and Zimbra (acquired by Yahoo for $350 million). Ongoing investments from that fund include rightcove, Glam, Yume, Webroot, OpenX, Trulia and others.
And that’s just Fund IX. Fund X, a $520 million fund raised in 2007, has invested in Groupon, Diapers.com, Etsy, Cloudera, Modcloth, Atlassian Software, SunRun and Squarespace.