(Bloomberg) —
Salt Lake City-based Pelion Venture Partners has raised $500 million for a new fund — an unusually large sum for a firm located outside of a coastal hub, and the largest in Utah history.
The funding is a bright spot during an industrywide downturn, as more venture firms have struggled to raise capital in the post-pandemic slump, and many investors have flocked to already-established Silicon Valley names.
Founded in 1986, Pelion was an early investor in companies including cybersecurity firm Cloudflare Inc., sleep monitoring company Owlet Baby Care Inc. and cloud upstart Domo Inc. Its backers have included the Los Angeles Fire and Police Pension System and the San Francisco Employees’ Retirement System, which both invested in Pelion’s 2021 fund, said partner Tyler Hogge.
“We’re at the beginning of a new wave” of startup creation in Utah, Hogge said. Local tech employees who got rich from their time at Qualtrics, Pluralsight LLC, Domo and other Utah companies are now investing in and creating new startups, he said. Hogge joined Pelion as an investor after Bill.com acquired his startup employer Divvy for $2.5 billion. “You had the famous Paypal mafia in Silicon Valley that invested in so many startups,” he said. “Well, we’re seeing mini-versions of that in Utah.”
Beehive state companies still represent a small slice of the US venture capital market — raising $1.15 billion last year, a fraction of the more than $200 billion that went to US startups. Funding in Utah has also fallen by more than two-thirds from the pandemic highs in 2021. The decline reflects a larger industry slowdown, as VC firms are battered by interest rates and a lackluster IPO market.
Firms in the US closed 508 venture funds in 2024 – the fewest in a decade, according to PitchBook. At the same time, investors in venture funds, or limited partners, have gravitated toward big firms that are considered safe bets. For example, Andreessen Horowitz alone raised 10% of the total in 2024. Meanwhile, many smaller firms have struggled.
Hogge said the Pelion team has about 10 of its 25 employees focused on investing. The firm has already made a handful of investments in Utah-based startups from the new fund, including defense technology startup Strider Technologies Inc., roofing company Remi Labs Inc. and AI financial services firm Accio Inc., which does business as Jump.
Hogge said Pelion invested roughly half of its last fund in Utah companies, and expects to do the same with its eighth fund. It also plans to devote $30 million to seed-stage deals.
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