This morning, OpenView Venture Partners declared the final closing of its sixth fund, totaling $450 million. This represents the firm’s largest fund to date, an increase of approximately 50% compared to its previous fund.

Headquartered in Boston, OpenView invests in companies worldwide. The existence of this $450 million fund was previously disclosed in an SEC filing last November.

According to two of its partners, as shared in separate interviews with TechCrunch, the firm’s core investment strategy remains unchanged. OpenView will continue to concentrate on what partner John McCullough refers to as “expansion stage business software.”

Specifically, this encompasses business software companies generating between $1 million and $10 million in annual recurring revenue (ARR). Partner Mackey Craven clarified to TechCrunch that roughly 80% of their leading investments target companies with $1 million to $5 million in ARR, with 60% focused on those between $1 million and $3 million in ARR.

Considering that expansion-stage startups are relatively modest in revenue, what prompted OpenView to secure a significantly larger fund compared to previous iterations while maintaining the same investment approach?

McCullough explained that the firm calculated the number of desired investments – aiming for 15 to 17, exceeding the 13 from the prior fund – the necessary funds for subsequent investments, and limitations encountered in earlier funds when choosing between new ventures and further supporting successful existing portfolio companies. These factors collectively justified the larger fund size.

The firm communicated to TechCrunch that it had a minimum target of $350 million and a maximum limit of $450 million for the fund.

Beyond the new capital, I was interested in OpenView’s perspective on current technology trends, including API-driven startups, no-code/low-code platforms, and insurtech. Regarding APIs, Craven expressed optimism, noting the increasing potential for software businesses built around APIs as a core product, and highlighted the attractive net retention metrics often associated with usage-based pricing models.

We also discussed the nuances of the no-code and low-code landscape, exploring the differences between services offering extensive customization for non-developers and those enabling the creation of entirely new applications without coding. Both categories fall under the broader no-code/low-code umbrella, despite their distinct characteristics. Craven confirmed that software companies are increasingly incorporating greater customization and flexibility. He anticipates the boundaries between true no-code capabilities and advanced customizations will become increasingly blurred over time.

Finally, concerning insurtech, Craven indicated that, due to its strong ties to financial services, it generally falls outside OpenView’s primary focus on business software. He suggested that companies like Noyo might represent an intersection of both insurtech and expansion-stage business software.

OpenView now possesses substantial new capital to execute its established investment strategy. While not the sole venture capital firm focused on business software – Shasta is another example – the increased capital brings heightened attention to OpenView’s performance and investment choices. It will be interesting to observe how the firm allocates these funds.