Exclusive: Veteran VCs Peter Wagner and Gaurav Garg Launch Wing Venture Partners
Last month, when the networking startup Cumulus Networks came out of stealth and announced a Series A investment by a bunch of notable venture capitalists, Peter Wagner, a longtime managing partner at Accel Partners, was one of them.
I took notice, in part because Wagner had been reported earlier this year to be working on a new fund with Gaurav Garg (pictured below), a seasoned venture partner at Sequoia Capital. Earlier this year, Fortune reported that they were working on a fund they called “Alpha Venturi.”
Today, they’re going public with the result of their efforts: Wing Venture Partners. The pair have raised $111 million with the intent to make early-stage investments in enterprise-focused companies.
Cumulus, Wagner told AllThingsD in a conversation yesterday, was part of what he and Garg called their “fund zero,” a sort of prototype portfolio meant to test their investment thesis. They have been making investments using their own capital since 2011, and have accumulated a portfolio of 18 companies. Among them are CloudPhysics, Instart Logic, Platfora and Shape Security, FireEye, MobileIron and Nimble Storage. “With the experience that we gained from doing that, we decided the time was right to bring a third party to the table,” Wagner said.
The general plan with Wing, Wagner said, will be to invest about $8 million to $10 million in early-stage companies looking to shake up how things are done in the enterprise. Their idea was to try and simplify the equation of what it takes to help an early-stage company focused on business technology to succeed. “We’re not going to do what the other firms do, like international investing. We wanted to focus on this one thing, and then think quite deeply about what it takes to help these companies succeed,” he said.
The focus will be on building companies that are going after opportunities in cloud computing, mobile technology and working with data. “The confluence of these three forces is really transforming every aspect of how companies use technology,” Wagner said. For instance, Cumulus has the ambition to shake up how software might transform how data centers are built. Shape Security is focused on providing security in a world where key corporate applications no longer run on internal infrastructure but in the cloud, and used via mobile devices.
And while it certainly feels as though there’s a sudden craze for enterprise-focused investments, Wagner doesn’t think the market has reached anything close to a bubble moment yet. “There are certainly other people interested in business technology now, and it’s certainly back in fashion. But the magnitude of the opportunity just far outstrips the resources that have been arrayed to fund and develop them. This is the biggest paradigm shift that Gaurav and I think we’ll ever see in our career. Almost every incumbent is threatened.”
Also note the amount raised. Wagner said he and Garg could have raised a great deal more. “We are trying hard to maintain discipline around the amount of capital that our strategy requires. We’re big believers in the idea that capital should flow from strategy, and strategy should not be dictated by the availability of capital … We thought really hard about the amount of capital we needed.”
Wing is close to announcing the first investments of the new fund, but Wagner didn’t drop any hints on who they are.
Before Sequoia, where he spent 10 years, Garg founded Redback Networks, a major Internet infrastructure company that went public in 1999, and which was acquired by Ericsson. His investments at Sequoia include Ruckus Wireless, Aruba Networks, FireEye, MobileIron, Jasper Wireless, RingCentral, Jawbone and NetScaler.
Wagner spent 15 years at Accel. The companies he was involved with there include ArrowPoint Communications, Fusion-io, Infinera, Nimble Storage, NorthPoint Communications, Opower, Redback Networks — where he and Garg met — Riverbed Technology and Tellium.