Cisco is the lead investor in a $500 million venture fund focused on early-stage bets

Key Points
  • Catalyst Labs, a management company run by Jon Sakoda, filed to raise $500 million.
  • Cisco is the fund's principal investor.
  • Sakoda will be making early bets, expanding Cisco's start-up investing strategy, which has been focused on later-stage companies.
A bicyclist rides by a sign in front of the Cisco Systems headquarters in San Jose, California.
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Cisco is cozying up to the start-up world as part of a plan to revive growth. As part of this plan, it's the principal investor in a $500 million venture fund that will be run by Jon Sakoda, a former partner at venture firm NEA.

According to an SEC filing on Friday, Sakoda is the managing director of Catalyst Labs Fund I and is looking to raise $500 million.

It's the first we've heard from Sakoda since May 14, when he wrote a blog post announcing that he was leaving NEA after 12 years to "build an entrepreneurial investing platform that is differentiated from what exists today."

The day after his post, the Wall Street Journal reported, citing people familiar with the matter, that Sakoda would be running an independent early-stage fund started by Cisco, which would commit hundreds of millions of dollars. Cisco, as the Journal reported, has an existing team with over 40 people and has invested more than $2 billion from its balance sheet into start-ups.

Catalyst is the name of the management company. The name of the fund will be revealed in the next few months when it's ready for launch, and it will be operating in stealth mode until then, according to a person familiar with the matter, who asked not to be named because the details are still confidential.

With tech companies like Alphabet, Intel and SAP pouring money into in-house venture groups, corporate venture investing has reached record levels, according to Crunchbase. Law firm DLA Piper said in March that corporations are currently providing about 30 percent of start-up capital.

However, Catalyst is structuring itself differently from a typical corporate venture fund, which explains why it's filing with the SEC to raise outside money.

Sakoda has invested across consumer and enterprise markets, leading NEA's investments in companies including ride-sharing businesses Uber and Didi Chuxing as well as social media company Snap, cybersecurity company HackerOne and videoconferencing start-up BlueJeans Network.

A Cisco spokesperson declined to comment.

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