Venture Firm Section 32 Secures $525 Million for New Fund
Section 32, a venture capital firm founded by former Google Ventures CEO Bill Maris, has successfully raised $525 million for its fifth fund, as reported. This new capital will be allocated between early-stage investments and follow-on funding opportunities.
Based in Palo Alto, California, Section 32 now manages $2.3 billion in assets and has achieved several significant exits throughout its six-year tenure. The firm has invested in various startups that later transitioned to publicly traded companies, including CrowdStrike, which went public in 2019; Coinbase, which debuted in 2021; and Relay Therapeutics, which entered the public market in 2020.
To date, Section 32 has supported around 100 startups spanning diverse software-driven industries, such as infrastructure, cybersecurity, gaming, enterprise solutions, quantum computing, precision medicine, and computational biology. Notably, it has also invested in electric vehicle (EV) boat startup Arc. While most of its portfolio consists of U.S.-based companies, some investments extend beyond the United States.
Among the firm’s most valued portfolio companies are Cohere, which is building an AI model ecosystem for enterprises and raised $270 million at a $2.1 billion valuation in June. Scale AI, valued at $3.5 billion in late 2020, had to lay off 20% of its workforce earlier this year. Additionally, HR tech company Gusto reported over $500 million in revenue in its latest fiscal year, following a valuation of nearly $10 billion in 2022.
Bill Maris established Section 32 in 2017 after leading Alphabet’s venture division, Google Ventures (GV). According to CEO and Managing Partner Andy Harrison, the firm’s mission is to “invest in software-driven businesses across technology and healthcare sectors that enhance the human condition.”
In 2021, Section 32 raised its fourth fund, initially targeting $400 million to $500 million, but secured a total of $740 million due to market conditions, as Harrison explained. This time, the firm has chosen to decrease the fund size, focusing closely on its upper limit in light of the current market environment. Although all funds from its fourth fund have been allocated, not every dollar has yet been deployed.
“Similar to Google Ventures, we maintain a broad focus in terms of stages and technology sectors,” said Harrison. “We primarily invest in Series A and B rounds, though we occasionally engage in later-stage investments.”
Typically, Section 32 makes 20 to 25 investments per fund, committing $5 million to $10 million in initial rounds and reserving substantial funds for follow-up investments.
Harrison, who spent over four years at Google, noted, “There is a significant amount of deal flow connected to Google, thanks to our relationships and history.” His experience includes key roles in business development and co-founding Verily Ventures, Google’s life sciences division. Before leaving in 2021, Harrison served on the executive leadership team at Google X.
Many of Section 32’s investments can be traced back to Alphabet, including Cohere and Inceptive, co-founded by experts behind the 2017 Transformer paper, as well as Exai Bio and BigHat Biosciences, which were founded by former leaders of Google Genomics.
“Numerous individuals we collaborated with at Google were involved in machine learning projects,” Harrison shared. “Many of them have transitioned into AI and generative AI roles. We are software investors, and it turns out that many of the latest developments in software involve AI applications, making it a focal point for us. This trend has provided a significant boost for our firm and our portfolio.”
Harrison also emphasized that Section 32 approaches investments in the rapidly evolving AI sector with caution.
“We maintain a disciplined approach. There's a commoditization zone we aim to avoid; big players like Google and Microsoft are likely to make these capabilities available for free or through existing software subscriptions,” he said. “Consequently, the market will have easy access to these tools.”
Therefore, Section 32 is concentrating on the application side of AI in sectors like cybersecurity, enterprise solutions, computational biology, and other areas that large cloud providers may overlook or not tailor for specific verticals.
The firm has already completed five to six new investments from its latest fund. Alongside this fund announcement, Section 32 also revealed the promotion of Wesley Tillu from senior principal to partner. Tillu joined the firm in 2021 after working at In-Q-Tel, the CIA's venture capital branch.
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