By Heather Somerville
SAN FRANCISCO (Reuters) - Silicon Valley venture capital firm Canvas Ventures has raised a $300 million fund to make new investments into startups working on fintech, healthcare, artificial intelligence and other cutting-edge technology.
The fund is the second for Canvas Ventures, which spun out of Morgenthaler Ventures, and provides the firm with nearly twice as much cash to invest. Canvas's first fund, raised in 2013, was $175 million.
"We will have more shots on goal with this fund," said Rebecca Lynn, partner at Canvas Ventures.
Canvas Ventures makes early stage investments of about $5 million to $20 million per company, with an emphasis on financial services or so-called "fintech" startups, healthcare technology, online marketplaces and artificial intelligence. Its previous investments include marketplace lending company Lending Club Corp. (N:LC), which went on to raise more than $1 billion in its 2014 initial public offering; mobile payments company Check, which was acquired by Intuit (O:INTU); and Wifi camera company Dropcam, which was acquired by Alphabet's Google (O:GOOGL).
While other venture firms raise billion-dollar funds, Canvas believes it can offer better returns to limited partners - the pension funds, family offices, endowments and foundations that invest in venture capital - with a fund under $400 million. One big exit, such as Lending Club, can provide the full return limited partners are looking for, Lynn said.
Lynn, widely considered a pioneer for women in the male-dominated venture capital industry, invests alongside Gary Little, a former Apple (NASDAQ:AAPL) employee who has invested in startups since the 1990s, as well as partners Paul Hsiao and Ben Narasin.
Canvas adds to a flurry of venture fundraising this year. Venture capitalists raised $8.8 billion in the second quarter, down from a whopping $14 billion in the first quarter but still keeping this year on track to be the biggest for venture capital fundraising since 2001.
"We're seeing new funds come out, lots of new funds," Lynn said. "It would concern me more if all this money was raised but there wasn't this next wave of technology innovation to support it. (But) there is a lot happening in technology."
Limited partners, as a result, are running out of cash to invest. Canvas started raising its fund in October 2015, but many limited partners did not have money available to invest until 2016, Lynn said. Canvas's fund closed in June.
This year is even worse, she said, with many limited partners already tapped out and delaying further investments until 2017.