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Union Square Ventures raises new funds

January 24, 2014: 1:17 PM ET

Early Twitter backer closes in on $350 million for new investments.

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FORTUNE -- Union Square Ventures, the first investor in such companies as Twitter (TWTR) and Tumblr, has raised approximately $350 million for a pair of new funds, Fortune has learned. The New York-based firm already has finalized all institutional commitments, and is said to be in the final stages of paperwork with individual investors.

The $350 million is split evenly between the firm's fourth early-stage fund and its second "opportunities" fund, which backs more mature companies. It originally had been targeting a total of $300 million.

Union Square was founded in 2004 by Fred Wilson, a veteran New York City venture capitalist who previously ran Flatiron Partners, and Brad Burnham, a onetime AT&T Ventures investor who also co-founded Tacoda (later acquired by AOL).

In addition to Twitter, Tacoda and Tumblr, successful USV deals have included Indeed.com (acquired by Japan's Recruit Co.), FeedBurner (acquired by Google) and Zynga (ZNGA). Existing portfolio companies include Coinbase, Foursquare, Kickstarter and Shapeways. 

Through the end of February 2013, USV funds had an aggregate internal rate of return (IRR) of around 64% -- making it one of the past decade's most successful firms. This includes a 66.96% IRR for its 2004 fund, a 38.88% IRR for its 2008 fund, a 29.04% IRR for its 2012 fund and a 61.44% IRR for its first opportunities fund.

Fred Wilson declined to comment on fundraising, citing SEC restrictions.

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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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