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5 December 2014

Xfund marks the spot for Harvard’s $100m

Harvard’s early-stage Xfund investment vehicle gets a second wind with latest $100m raise.

Author: Gregg Bayes-Brown, editor

Xfund, an early-stage investment fund from Harvard, has announced the closing of its second fund at $100m, building on the $73m seed fund first reported on by Global University Venturing in October.

Launched in 2012, the Xfund (otherwise known as Experiment Fund) sees its existing partners New Enterprise Associates (NEA), Breyer Capital, Accel Partners return to cornerstone Xfund 2, and have raised the cash alongside multiple unnamed partners from the institution itself.

Much like the original, which was less than $10m in total according to news provider Wall Street Journal, Xfund will have a focus on seed and series A rounds. The fund is entirely independent of Harvard, and the university has no role in investment decision nor will it receive investments for companies founded by current students of the university – a nod to programming prodigies who want to follow in the footsteps of famous Harvard dropouts Mark Zuckerberg and Bill Gates.

The fund will be managed by former NEA partner Patrick Chung, who has joined the fund full time as a general partner. The focus, while early-stage, will not be restricted to Harvard spin-outs and startups. This flexibility allows XFund is drastically increase its potential dealflow and build on the geographic reach of the original fund, ranging from nearby Massachusetts Institute of Technology (MIT) to ideas and talent stemming from Stanford, Caltech, the University of California, and other institutions near Xfund’s recently opened Silicon Valley office.

Xfund 2, as with the first, will continue to invest across numerous sectors. During the lifetime of the original fund, Xfund saw 3,500 deals and ultimately backed five. Xfund-backed Kensho, an MIT and Harvard company developing artificial intelligence for the financial industry, recently attracted $15m from investment bank Goldman Sachs. Ravel, a legal research startup founded by Stanford graduates, raised $8.1m in a round involving NEA and the XFund. Other startups include nursery device firm Rest Devices, apartment search platform Zumper, and TV and mobile firm Philo.

Patrick Chung, general partner at Xfund, said: “When we founded Xfund three years ago, it was an experiment to bring the nation’s top venture capital resources to the staggering talent that had grown up in university towns. The experiment is working: our founders have access to decades of company-building success and to rare intellectual firepower in these universities. We think the most exceptional founders have technical talent rooted in a liberal arts background – so we seek to invest in individuals with this experience and potential.”

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