HotelTonight, Slack stakeholder Accel stays on top with $2.5B fund

Invest early and stand by your bets. Don’t buy logos or chase
unicorns. That’s the Accel philosophy.
At 35 years old, it has served them well, bagging the firm dozens
of high-profile exits, including nine IPOs and 12 acquisitions in
the last four years.

Now, sources confirm to TechCrunch, the respected venture
capital firm has nabbed $2.525 billion — its largest pool of
capital yet — for three new funds: $525 million for its
fourteenth early-stage fund, $1.5 billion for its fifth growth fund
and $500 million for its second Leaders Fund, or a
dedicated pool of capital meant to help the firm strengthen its
positions on particularly competitive bets.

Accel, which operates offices in Palo Alto, San Francisco,
London and Bengaluru, is hot off the heels of a big exit. Its
portfolio company HotelTonight, in
which it was the very first institutional investor, is
selling to Airbnb
in what is the home-sharing company’s
largest acquisition yet. The deal is
said
to be worth roughly $465 million, or just above the $463
million valuation the on-demand hotel booking application garnered
with a
$37 million
Series E in 2017.

The firm can
thank Brian O’Malley
, now a general partner at Forerunner
Ventures, for introducing Accel to HotelTonight back when he was a
general partner at Battery Ventures in 2011. Accel and Battery
co-led HotelTonight’s Series A, and O’Malley went on to become
a partner at Accel. The firm subsequently invested in
HotelTonight’s Series B, C, D and E financings, holding true to
its promise to stand by its bets.

Today, Accel is the largest stakeholder in HotelTonight and can
expect a decent payout in the coming months. Workplace messaging
platform Slack, however, is
Accel’s true portfolio standout. The company, worth more than
$7
billion
, is expected to go public this year. In February, the
San Francisco-based unicorn
filed

confidentially
with the U.S. Securities and Exchange Commission
to make its public market debut; whether that be via a traditional
initial public offering or a direct
listing
, a newfangled approach to going public, is still up in
the air.

Accel, at consumer technology investor Andrew Braccia’s recommendation,
invested in Slack when it was still Tiny Speck, a seed-stage gaming
startup that would go on to become an office necessity. When Tiny
Speck pivoted to become Slack, the company’s chief executive
officer Stewart Butterfield offered to pay back it’s Series A and
B investors, including Accel. Braccia declined.

“The reason we invested in Tiny Speck was because we were
investing in that team,” Braccia told TechCrunch in 2015. “I
told Stewart, ‘if you want to continue to be an entrepreneur and
build something, then I’m with you.’ ”

Now owning a roughly 20 percent stake in Slack, Braccia’s
faith in Butterfield will result in a billion-dollar payday for the
firm.

Some other high-profile wins for Accel include Qualtrics, which
famously accepted an
$8 billion
acquisition offer hours before completing a Nasdaq
IPO. According to Qualtrics’ IPO paperwork, Accel owned a stake
worth
more than $1 billion
. PagerDuty, which is
said
to have confidentially filed in January, and CrowdStrike,
a cybersecurity business that
reportedly
hired banks for its IPO last fall, are among
Accels’ upcoming exits.

Since Accel’s 2016 fundraise got them a fresh
$2 billion
to invest in startups, the decades-old firm has
nabbed some younger talent to help it navigate an inevitable
generational transition. Shortly after that fund announcement,
Accel added principals Amit Kumar and
Steve
Loughlin
, a pair of co-founders of Accel portfolio companies
CardSpring and RelateIQ, respectively. In 2018, the firm
hired Maya Noeth
as a principal to lead its consumer growth
investments, Ethan Choi to back startups in the enterprise and
consumer-subscription spaces and Cherry Miao as a vice president
focused on growth-stage companies. 

Its newest cohort of dealmakers — poised to become partners
down the line — indicates Accel is conscious of an impending
generational transition and prepared for the older investors to
pass the baton to the younger folk.

Accel is among several incumbent venture funds to raise money
from limited partners in the last year. Bessemer Venture Partners, one of
the oldest players in the game, closed on
$1.85 billion
for its tenth flagship fund in October; Insight
Venture Partners brought in
$6.3 billion
in July; Kleiner Perkins raised $600
million
for its eighteenth early-stage fund in late January;
and Menlo Ventures grabbed
$500 million
for Series B and C rounds in February. Other
outfits,
NEA for example
, are in the process of closing up big, big
funds.

At a time when nouveau venture funds are raising funds equipped
with
innovative investment strategies
and
young teams
, Accel and some of its counterparts are proving old
dogs can learn new tricks — or, at least, continue to lead the
pack with no new tricks at all. 

Source: FS – All Tech News 2
HotelTonight, Slack stakeholder Accel stays on top with .5B fund