Avalon Still Raising Capital After Landing $161M for Ninth Fund

Xconomy San Diego — 

Avalon Ventures, the San Diego-based venture capital firm founded by Kevin Kinsella, has surpassed its targeted minimum fund-raising goal for its ninth venture fund. After closing on a significant investment in the fund yesterday, Avalon Ventures IX now stands at $161 million, according to Kinsella.

These days, it is practically headline news when a San Diego-based venture firm raises a new fund. While the lights are still on at many local venture firms, the partners must be getting their deliveries from Meals on Wheels, because they’re not getting out much.

Avalon, in contrast, has continued to actively invest in new startups, in both life sciences and technology, after closing its eighth fund at $150 million in early 2008. The firm made about two dozen investments over the past two years.

Avalon’s Kinsella, who was a solo practitioner when he raised his first small fund here in 1983, wanted to attract between $150 million and $200 million for Avalon IX when the firm began raising capital in May. With funding now at $161 million, Kinsella says the firm is well past its minimum target of $150 million—“but we still have another large close to go with a couple of existing LPs in a month or two.”

Avalon focuses on early stage investments, which the firm’s four partners tend to identify and develop on their own. Kinsella and partner Jay Lichter manage the life sciences deals, which include recent investments in Avelas Biosciences, aFraxis, Otonomy, and Zacharon Pharmaceuticals. Partners Steve Tomlin and Rich Levandov, who works in Boston, oversee the firm’s investments in wireless communications and Web media applications, which include Zynga, Chumby Industries, E-Band Communications, Cloudkick, and Nabbr.

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