Blue Cloud Ventures
Funded

Accelerate the growth of SaaS companies in the U.S.

DEAL TYPE Disclosed
DEAL STATUS Funded
DEAL STAGE Series C and above
DEAL STRUCTURE Funds
MINIMUM INVESTMENT USD 50,000
FUNDRAISING GOAL USD 100,000,000
HEADQUARTERS United States

Background

Blue Cloud Ventures (“BCV”) is a U.S. based software-focused venture capital firm, addressing gaps in the growth stage funding market. BCV is currently raising their third fund of US$100m and is set to provide investors an opportunity to invest across Software as a Service (“SaaS”) companies from the U.S. Fundnel has been selected as the exclusive platform of choice to offer this opportunity to regional investors to participate in the acceleration and growth of best-in-class SaaS companies in the U.S.

Blue Cloud Ventures
Established in 2012, BCV is headed up by a strong investment team led by seasoned entrepreneurs, investment banking and tech veterans Mir Arif and Rami Rahal; who are in turn supported by two key operating partners, Joel Lou and Patrick Hofmann, who head up Asia Pacific and Europe respectively. Their collective past investments in BCV’s first two funds include (among others):
  • AFS Technologies - acquired by Court Square Capital
  • BeyondTrust - acquired by Veritas Capital
  • BTI Systems - acquired by Juniper Networks (NYSE: JNPR)
  • Reflexis - acquired by Great Hill Partners
  • Reval - acquired by Ion Investment Group
  • Tapad - acquired by Telenor (OSE: TELNY)
BCV is targeting investments across leading SaaS, infrastructure software and open source software companies in the U.S., with recurring revenue models of c.US$10m – 50m p.a. and 2 – 5 years from an exit. They have raised two funds (both fully invested) of vintage year 2012 and 2015, and are currently raising their third fund of US$100m:

  • Fund I - US$11.8m
  • Fund II - US$50.2m
To date, both Fund I and II have been deployed across 21 companies – including Aras, CloudBees, Cityworks, CareCloud, Vidyo, etc. with six exits (avg. holding period of c.28 months). The exits have generated a realized return of c.1.8x. At present, BCV records a net IRR of 19.5% and 17.6% for Fund l and II respectively.

Blue Cloud Ventures – Fund III
Commenced in 2017, BCV Fund III has raised a total of US$78m as of Dec 2017; with a target fund size of US$100m. The fund had a first close of US$53m in May 2017 with MassMutual (one of the largest insurance companies globally) as a lead LP, along with other institutional family offices and private investors. BCV Fund III will focus on investing across 12 companies (ticket sizes of US$3m – 10m) alongside other tier-1 VC firms such as Bain Capital Ventures, Charles River Ventures, FirstMark Capital, Scale Venture Partners, Sequoia Capital, etc. in growth rounds of leading enterprise software and SaaS companies in the U.S. As of Dec 2017, BCV Fund III has already invested US$10m in two market leading SaaS companies:

  • OneLogin (US$5m)
  • Wrike (US$5m)
BCV offers growth propositions for companies by bringing a unique set of value-add which includes buy-side, fundraising and sell side M&A execution capabilities, as well as a solid international network for overseas expansion and active advisory board of tech entrepreneurs.

Leveraging on the success of BCV’s previous funds, Fund III will continue to evaluate companies based on 4 investment criteria, which significantly reduces portfolio risk:

  • Targeting growth companies – invest in growth stage funding rounds of leading SaaS companies with recurring revenue models, run-rate of US$10m – 50m, growth rate of >50% and 2 – 5 years away from an exit
  • Maximising upside and minimising downside – investing across a mix of high and stable growth recurring revenue companies, maximising upside potential while minimising downside risk through senior preferred structured securities
  • Optimising return of capital – deployment of capital over 2 – 3 years across companies which are 2 – 5 years away from an exit, enabling a faster return of capital and consistent returns
  • Strong lead VC investor – co-invest / collaborating with a prominent VC funds; resulting in large volume of unique and high quality deal flow

Traction

Invested US$53.8m across 21 companies with a net IRR of 19.5% and 17.6% for Fund l and II respectively; return multiple to amount invested of 2.14x and 1.41x for Fund I and II