US-based venture capital firm CRV has closed a US$750 million fund, marking its twentieth flagship raise since its founding in 1970.

CRV is an early-stage investor that has backed over 750 startups, including DoorDash, Mercury, and Vercel.

The new fund is smaller than the US$1 billion fund raised in 2022.

The firm is not raising a late-stage fund after returning US$275 million from its previous US$500 million Select fund to investors.

CRV said the new capital will target seed and series A startups, focusing on consumer and developer tools companies.

Recent investments by CRV include CodeRabbit, which provides AI code review, and Outtake, an AI-powered cybersecurity company.

🔗 Source: TechCrunch

🧠 Food for thought

1️⃣ Venture funds are strategically downsizing amid challenging market conditions

CRV’s decision to raise $750 million instead of repeating their previous $1 billion fund reflects a broader industry trend toward smaller fund sizes.

Venture capital fundraising has declined significantly, with only 87 vehicles closing on $10 billion in recent quarters, marking the lowest average fund size since 20191.

This downsizing trend isn’t just about market conditions, but also a strategic response to performance pressures.

CRV explicitly stated that follow-on rounds for many portfolio companies would lower their overall returns, leading them to abandon late-stage investing entirely.

The firm’s ability to raise their entire $750 million in just four weeks with double the demand suggests that limited partners prefer focused strategies over larger, potentially diluted approaches.

2️⃣ Established firms gain advantage by demonstrating capital discipline

CRV’s decision to return $275 million from their $500 million Select fund to investors demonstrates the type of disciplined capital allocation that appeals to today’s cautious limited partners.

Recent CRV developments