Greylock Partners has raised a $1.5 billion fund, opting against the larger vehicles that have become common among leading venture capital firms despite saying it had the capacity to raise substantially more.
The 61-year-old Silicon Valley firm announced its 18th fund on Tuesday. The new vehicle is 50% larger than Greylock’s $1 billion fund raised in 2023 and is roughly in line with the capital it raised across its seed and flagship funds during the pandemic.
Partner Saam Motamedi said the firm deliberately chose not to increase the fund further, even though it could have raised a “multiple” of the amount.
“Our mission is to be the most important partner to the most important entrepreneurs,” Motamedi said.
Greylock said its approach relies on maintaining a small portfolio so partners can provide hands-on support, including helping founders recruit engineers and connect with potential customers. Motamedi cited Baseten, an AI infrastructure startup that Greylock first backed in its Series A round in 2022 and which is now valued at $13 billion, as an example of that strategy.
The firm’s 10 partners typically make only one or two new investments each year, resulting in an expected portfolio of about 25 companies from the new fund.
Early-stage investing remains the priority
As with previous funds, the new capital will primarily be used to incubate startups and lead seed and Series A funding rounds.
Greylock has built much of its reputation by helping launch companies at an early stage, including Palo Alto Networks, which began inside Greylock’s offices 21 years ago, and cybersecurity startup Abnormal, which the firm incubated in 2018 and was last valued at $5.1 billion.
The firm also expects to invest selectively in later-stage companies that it did not back earlier.
According to Motamedi, Greylock’s 17th fund included growth-stage investments in Anthropic, Revolut and Wiz. The firm’s first investment in Anthropic came during the AI company’s Series F funding round at a $183 billion valuation.
“It’s the largest investment in the firm’s history,” Motamedi said.
Motamedi estimated that about 15% of the new fund will be allocated to later-stage startups, while the majority will continue to target early-stage opportunities.
He said Greylock’s investment process reflects that focus. Weekly partner meetings are centred primarily on entrepreneurs rather than established companies.
“We’re getting to know people even before they start a company. It’s really a bet on the person,” Motamedi said. “Often the company doesn’t even exist.”
TL;DR:
Greylock has raised a $1.5 billion fund but says it intentionally capped its size to maintain a focused early-stage investment strategy. The firm expects to back about 25 companies while reserving a small portion of the fund for selected growth-stage investments.
Key points:
- Greylock raised a $1.5 billion 18th fund, up from $1 billion in 2023.
- The firm said it could have raised significantly more but chose a smaller fund.
- About 25 startups are expected to receive investments from the new fund.
- Most capital will target seed and Series A companies, with roughly 15% reserved for later-stage investments.
- Greylock’s recent growth-stage investments include Anthropic, Revolut and Wiz.
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