Dan Primack

The latest on private equity, M&A, deals and movements — from Wall Street to Silicon Valley

Exclusive: Roger Ehrenberg raises big(ger) fund for big data

December 3, 2010: 9:36 AM ET

"Big data" is the tech startup world's latest buzzword, and one New York City investor has raised a fund to capitalize on the revolution.

IA Ventures has closed its debut fund with $50 million in capital commitments, Fortune has learned. The New York-based firm was formed earlier this year by Roger Ehrenberg, a onetime quant trader who has gone on to become a prolific angel investor and blogger on startup issues.

I first reported about the fund earlier this year, over at my old blog. At the time, Ehrenberg was seeking around $25 million to invest in "big data," without plans to tap "traditional" VC fund investors like foundations or pension funds. Instead, he would raise from prop trading firms, hedge funds, other venture capitalists and a media empire (Thomson Reuters).

He also was expecting a final close by the end of March.

Fast forward ten months, and some things have changed. Ehrenberg held a first close in the spring, but couldn't quite ignore inbound interest from traditional LPs. So he decided to open things up a bit, and ended up more than 50% oversubscribed.

"We brought in three institutions plus an endowment," Ehrenberg says of the new support, which included commitments from Cendana Capital, TIFF and Horsley Bridge. "Going to $50 million doesn't change our strategy of seed and early-stage investing in big data, but it does provide us additional capital to "pursue a life-cycle approach to supporting our companies."

What that means is that IA Ventures is following a fairly traditional model of VC investing -- creating a concentrated portfolio and remaining involved until its companies either go public or are sold. This stands in contrast to many of Ehrenberg's super-angel brethren, whose investment strategies have been derisively referred to as "spray and pray."

IA Ventures also is sticking hard to its focus on big data, which it describes as "the belief that managing and extracting value from massive, occasionally unstructured, often real-time data sets is a competitive advantage." So far it has 15 disclosed portfolio companies, including The Trade Desk (real-time bidding for online ads), Recorded Future (extracts time and event information from the web) and MetaMarkets (supply-side price discovery and predictive analytics platform for media industry).

"The space Roger and his team are targeting is really burgeoning," says one of IA Ventures' institutional investors. "A wave is starting to build, and I think that big data in a couple of years will be where things like mobile are today. I'm hearing some other VCs begin to talk about it, but these guys seem to understand it better than almost anyone else."

In addition to Ehrenberg, the IA Ventures team includes Brad Gillespie (ex-Microsoft, Lockheed Martin), Ben Siscovick (Allen & Co.) and Justin Singer (shared with Kinetic Trading, an IA portfoflio company).

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Dan Primack
Dan Primack
Senior Editor, Fortune

Dan Primack joined Fortune.com in September 2010 to cover deals and dealmakers, from Wall Street to Sand Hill Road. Previously, Dan was an editor-at-large with Thomson Reuters, where he launched both peHUB.com and the peHUB Wire email service. In a past journalistic life, Dan ran a community paper in Roxbury, Massachusetts. He currently lives just outside of Boston.

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