Benchmark Capital, the storied Silicon Valley VC firm known for early investments in eBay, Snap, Uber, and Twitter, is breaking with one of its signature traditions: keeping its funds to about $425 million and backing only young startups. After more than two decades of restricting its vehicles to that amount or lower, the outfit has closed on commitments of $2 billion across two new funds, including a $1.25 billion vehicle dedicated to later-stage investments.
The new funds are part of a significant shift in Benchmark’s strategy, which has traditionally been characterized by being staunchly selective and taking a large—typically 20%—stake in every startup the firm backed. However, this approach has likely prevented the firm from investing in capital-intensive AI startups, particularly foundation model makers, whose round sizes often reach into hundreds of millions.
Benchmark’s new $750 million early-stage fund will give the firm more flexibility to write checks in an environment where early-stage valuations have skyrocketed. The firm has traditionally backed companies at the Series A stage, but has recently given itself more flexibility to invest in companies at other early stages of development. In recent months, Benchmark backed two Series B startups: Gumloop and Monaco.
The firm dipped its toe into late-stage investing when it raised a $225 million special purpose vehicle (SPV) to participate in a $1 billion pre-IPO round for Cerebras. Benchmark first led the chipmaker’s Series A in 2016, and Cerebras held its IPO last month, returning Benchmark $3.25 billion at the IPO price. That windfall prompted the firm to raise a dedicated growth fund.
The new vehicle will make five to six large investments in both existing portfolio companies and new startups, according to a person familiar with Benchmark’s strategy. The two new funds aren’t the only changes at Benchmark. Over the last two years, the firm has undergone a significant shift in its general partners. In 2024, Miles Grimshaw left the firm to rejoin Thrive Capital. Then, last year, Sarah Tavel—Benchmark’s first and only female general partner to date—took on the less-involved role of venture partner, while Victor Lazarte departed to start his own VC firm.
To replenish its ranks, Benchmark added two new high-profile investors to its team: Randle, poached from Kleiner Perkins, and Jack Altman, the brother of OpenAI CEO Sam Altman. The moves suggest that even Benchmark, long defined by its resistance to growth, now sees the AI era as requiring a different playbook — more capital, more stages, and fresh blood at the partner table.
This shift in strategy is a response to the changing landscape of venture capital, where larger funds are becoming increasingly necessary to compete with other firms. With this new capital, Benchmark aims to take advantage of opportunities that were previously out of reach.
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