Benchmark Raises $2B, Launches First-Ever Growth Fund
Benchmark Capital, the Silicon Valley firm behind early bets on eBay, Uber, Snap, and Twitter, has done something it has never done in its more than two-decade history: raised a growth fund. The firm has closed on commitments of $2 billion across two new funds, including a $1.25 billion vehicle dedicated to later-stage investments, according to the Wall Street Journal. The move marks a dramatic break from Benchmark Capital’s growth fund tradition of capping vehicles at around $425 million and sticking to early-stage startups only.
The firm’s tight-fund strategy was never an accident. By keeping fund sizes small and taking roughly 20% stakes in every company it backed, Benchmark engineered a model built for outsized returns. But the AI era has complicated that calculus. Capital-intensive AI startups particularly foundation model makers routinely raise in the hundreds of millions, effectively locking Benchmark out of backing Anthropic, OpenAI, Periodic Labs, Reflection AI, or Recursive Superintelligence.
A Cerebras Windfall Changed the Math
The catalyst for the growth fund was Benchmark’s Cerebras position. The firm raised a $225 million special purpose vehicle to participate in a $1 billion pre-IPO round for Cerebras, having first led the chipmaker’s Series A back in 2016. When Cerebras held its IPO last month, it returned Benchmark $3.25 billion at the IPO price and that windfall made the case for a permanent growth vehicle.
The new $1.25 billion growth fund will make five to six concentrated bets in both existing portfolio companies and new startups. Meanwhile, Benchmark’s complementary $750 million early-stage fund gives the firm more room to write larger checks at seed, Series A, and Series B, as early valuations have surged. Recent early-stage bets include Gumloop, an enterprise AI agent builder, and Monaco, an AI-native CRM platform.
The fund restructure also coincides with a generational shift at the partner table. Sarah Tavel, Benchmark’s first and only female GP, stepped back to venture partner last year, while Victor Lazarte departed to launch his own firm. Benchmark has since added Everett Randle, poached from Kleiner Perkins, and Jack Altman, brother of OpenAI CEO Sam Altman. Even Benchmark, it seems, now needs a different playbook for the AI era.
