Insight Partners selling $1B in startup stakes, including Wiz, to free up funds for investors
The private equity firm is on the verge of closing a new $10 billion-plus fund, roughly half the amount originally targeted, the Financial Times also reported. The VC has established a continuation fund that enables LPs to sell their stakes in portfolio companies to other investors, while allowing Insight to keep its ownership in the underlying company.
Private equity firm Insight Partners is on the brink of closing a new $10 billion-plus fund, roughly half the amount originally targeted, the Financial Times reported on Sunday, citing five people with knowledge of its plans.
The report also revealed that Insight is using a private equity-style structure to sell more than $1 billion worth of stakes in startups and to free up cash to return to investors. One of the startups is Israeli cybersecurity firm Wiz, which had called off a $23 billion deal with Google parent Alphabet in July. According to the Financial Times, the VC has established a continuation fund that enables LPs to sell their stakes in portfolio companies to other investors, while allowing Insight to keep its ownership in the underlying company.
Wiz raised around $1 billion in funding at a $12 billion valuation earlier this year.
Insight will not formally close its 13th fund until early next year, the report said, adding that the final figure may be closer to $12 billion. The New York-based private equity firm raised $20 billion for its 12th flagship fund in 2022, aiming to ramp up investments in software and technology companies.
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Insight, with more than $80 billion in assets under management, last year cut its target from $20 billion to $15 billion, having raised just $2 billion from investors.
Despite settling for $10-$12 billion, Insight, which is one of the largest investors in Israeli high-tech, remains a substantial fund, larger than the entire Israeli VC market. Its investment approach in Israel has undergone a change over the past year, with a focus on early-stage investments rather than large-scale funding. This shift is significant for a fund like Insight, which requires billion-dollar exits to realize returns on its investments. In 2021, Insight invested $25 billion in startups globally, including many Israeli companies. Insight has invested in over 100 Israeli companies to date, with noteworthy investments including the acquisition of Armis, as well as investments in companies like monday.com, Wix, Papaya Global, Optibus, and Wiz.
