Lightspeed builds a continuation fund around its OpenAI stake
What's the deal? Lightspeed is moving assets, anchored by its OpenAI stake, into a continuation fund it will continue to manage. BloombergDealroom has a profile for this one. Try Dealroom → reported the deal, code-named Project Mercury, citing people familiar with it.
What's inside? The vehicle gathers holdings from two Lightspeed funds — Select V and Opportunity II — plus a separately managed account. Coller CapitalDealroom has a profile for this one. Try Dealroom → is the lead buyer, with UBSDealroom has a profile for this one. Try Dealroom → advising.
How it works: A venture fund typically has a roughly 10-year life, after which it must sell its holdings and return cash to investors. A continuation fund breaks that clock: the manager moves chosen positions into a new vehicle, a buyer funds it, and original investors either take the cash or roll into the new fund.
The upshot: Lightspeed hands its backers liquidity while keeping exposure to OpenAI.
What's the endgame? The structure lets Lightspeed hold a prized position past its original fund's deadline. OpenAI is the anchor asset, so the firm avoids a forced sale of a stake it wants to keep.
Lightspeed did not reply to Bloomberg's messages, and Coller declined to comment.
The signal: Continuation funds are becoming a standard tool for venture firms holding stakes in late-stage AI companies that stay private longer. When exits via IPO or acquisition slow, managers turn to the secondary market to deliver returns without letting go of their best bets.
Read more: The Tech Street Now
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