Exclusive: Facebook investor Meritech raises $425 million

April 27, 2011, 5:42 PM UTC

Meritech Capital Partners, a Palo Alto-based firm focused on later-stage VC investing, has closed its fourth fund with $425 million in capital commitments (it had been targeting $400 million – the same amount it raised in 2005 for its third fund). Expect an official announcement sometime later today.

Meritech is an interesting group, in that it has largely flown under the radar during the recent late-stage VC boom. This despite having gotten into Facebook at a $500 million valuation, and having watched three portfolio companies go public already this year: Cornerstone OnDemand (CSOD), 21ViaNet (VNET) and Zipcar (ZIP).

So I spent some time on the phone with Meritech managing director Paul Madera. Two quotes of particular interest:

1. In response to a question about how the influx of late-stage investors impacts Meritech: “I don’t think it was much of a factor. A lot of the early-stage guys who are going late are doing different sorts of deals than us, like being the first institutional money into a more mature tech company. Kind of the old Summit or TA model. Some of the firms also are doing much larger deals than us. We still focus on investing $10 to $20 million into companies that already are VC-backed.”

2. On how long the IPO window may stay open: “We think it’s a longer window that will remain open for two reasons. The quality of companies going out is really high right now, as is the quality of companies on file and about to be on file. At the end of a cycle, you usually see a tail-off in quality. Also, the overall economic environment isn’t great, but it is continuing to improve. I think we’re less like to have the types of economic down-shocks that could freeze public market investors.”

So far, Meritech has done one deal out of the new fund: Leading a $48 million Series D round (in February) for cloud file and storage company Box.net.

In other Meritech news, expect the firm to announce a new partner within the next week or so. Madera wouldn’t spill the beans on who it is…