Group 11 strikes $20 million deal for second fund holdings, including Tipalti, Navan, and Sunbit

The ongoing drought in technology IPOs over the past two years continues to drive secondary transactions within venture capital funds. In these transactions, fund investors (LPs) opt for early sales of their holdings to other entities, allowing the latter to acquire shares deemed attractive. Another such deal was announced on Thursday when venture capital firm Group 11 said that it has partnered with StepStone Group, a global private markets investment firm, and with Industry Ventures, an investment firm focused on private technology investments, through a $20 million secondary transaction to acquire 12% of Group 11's second fund. The parties closed the deal directly, without the involvement of any placement agent or investment bank.

Last April, Group 11 partnered with StepStone Group through a $50 million secondary transaction to acquire 27% of Group 11's third fund.

Group 11, which was founded in 2012 by single General Partner Dovi Frances, finalized a $200 million raise for its Fund V at the end of 2021 and will soon announce its Fund VI. The cumulative value of Group 11's portfolio stands at approximately $1.2 billion, across six funds.

Group 11's Dovi Frances.

The deal enabled investors in Group 11's second fund (2015 vintage), which initially raised $41 million, to realize their positions partially or entirely. Through this deal, participating Group 11 investors received around 3X net cash on cash return, representing a 20% net IRR on their investment.

Group 11's second fund includes investments in Tipalti, which raised $270M at an $8.3BN valuation in Q4 2021; Navan, which raised $300M at a $9.3BN valuation in Q2 2022; Sunbit, which raised $130M at a $1.1BN valuation in Q2 2021.