The New Mexico State Investment Council approved $10
million on Tuesday for Sierra Ventures of California, a Silicon Valley giant
that plans to establish a local office for investments in New Mexico startups.
Its the first such SIC commitment since 2008, when the recession forced the
council to freeze new contributions to local venture funds through its Private
Equity Investment Program.
But in January, the council voted to restart that program, authorizing up to $40
million per year for new commitments.
Sun Mountain Capital, which advises the SIC on the program, recommended Sierra
Ventures because of its broad reputation for building technology startups into
large, successful companies, said Sun Mountain Managing Partner Brian Birk.
"Sierra Ventures is one of the leading Silicon Valley venture capital funds,"
Birk said. "It has a 30-year history of early-stage technology investments, and
it's considered one of the very top brands in the venture capital industry."
Sierra Ventures has managed more than $1.5 billion in investments from nine
funds since launching in 1983. It led 35 of its portfolio companies to
successful initial public offerings, some of which are now multibillion-dollar
corporations.
The SIC commitment is part of a new, $150 million fund Sierra is raising to
invest in early-stage technology companies in mobile communications, social
media, video, cloud computing and energy efficiency.
Sierra will invest in 15 to 20 startups, although only some of them will be in
New Mexico.
Under the private equity program, venture funds that accept SIC money must
invest in local companies, or encourage others to invest, at least as much as
the SIC's commitment to the fund.
"Typically, SIC investments in venture funds generate six times more investment
in New Mexico, or in this case, about $60 million," Birk said. "But with a firm
like Sierra, which has co-invested with many other venture capital funds over
the years, I expect the investment multiplier could be even higher."
Mark Fernandes, a managing director for Sierra's new fund, said Sierra is
already involved in one New Mexico company, water purification firm MIOX Corp.,
which received more than $8 million from Sierra since 2007. In addition, Sierra
has looked at about 20 other local companies for potential investments.
Seven of the SIC's 10 members approved the commitment to Sierra. Gov. Susana
Martinez, who chairs the council, and two other members were absent.
___
(c)2013 the Albuquerque Journal (Albuquerque, N.M.)
Distributed by MCT Information Services
