We are excited to announce the closing of Spectrum Equity X, L.P., a $2 billion growth equity fund focused on internet-enabled software and data services companies. While closing our tenth fund is an important milestone for the firm, it’s not lost on us that we did so during a particularly volatile period worldwide. Despite the tumultuous environment, our investors’ support has been unwavering, and we are profoundly grateful for their continued commitment and partnership. As with prior funds, our capital base in Fund X is comprised mostly of existing investors, many of whom have been with Spectrum for decades, as well as several new investors. We are also delighted to welcome over 85 founders and executives from our current and past portfolio companies as partners in this fund. Our relationships with management teams are at the core of who we are as a firm, so it is particularly gratifying to receive their fund commitment.
Our investors’ confidence in our strategy allows us to continue to do what we’ve done best for nearly thirty years – identify attractive, dynamic businesses, and help them scale to become category leaders. Helping to build a great company is the most rewarding aspect of what we do, as it creates enduring value not just for our investors, but also for all key constituencies – including customers, employees, and fellow shareholders.
Closing Fund X represents a significant achievement for the firm and an opportunity to reflect on the principles that have guided us over the last three decades. Consistency and discipline, key tenets of our investment approach at Spectrum, have been critical to our success through many market cycles. They’ve guided our incremental fund size growth and our commitment to originating opportunities with capital-efficient internet and software businesses, irrespective of prevailing trends in the financial markets. In today’s volatile climate, it will be more important than ever to rely on this approach to guide our strategy going forward.
Like prior Spectrum funds, Fund X will provide capital to companies with proven, scalable business models that exhibit high growth with recurring revenue. While Spectrum typically invests between $25 million and $200 million in a mix of control and minority transactions, the firm also closed its third Discretionary Overage Program at $200 million, enabling us to pursue larger transactions or follow-on investments.
Although a great deal of macro uncertainty accompanies this post-pandemic period, we remain steadfast in our belief that the internet will continue to transform every aspect of the economy, leading to a proliferation of innovative technology companies and powerful consumer tools. We are as passionate as ever about the extraordinary potential of business models delivering software and information over the internet, and as we embark upon Fund X, we are excited for the opportunities that lie ahead.
For more information about Fund X, see the press release.