Goldman Sachs is acquiring Industry Ventures for up to $965M as alternative VC exits surge

Goldman Sachs has agreed to acquire Industry Ventures, a 25-year-old, San Francisco-based investment firm managing $7 billion in assets, CNBC reported on Monday. The move highlights the growing importance of secondary markets and buyouts amid the slow pace of traditional venture exits.

The investment bank is paying $665 million in cash and equity, with up to $300 million more tied to the firm’s performance through 2030, according to Goldman’s release. The acquisition is expected to close in the first quarter of next year, and all 45 Industry Ventures employees are set to join Goldman.

The acquisition comes as venture funds increasingly turn to non-traditional exits amid a prolonged IPO drought. Earlier this year, Industry Ventures founder and CEO Hans Swildens told TechCrunch’s StrictlyVC Download podcast that tech buyout funds now account for 25% of all liquidity in the venture ecosystem—“a huge chunk of liquidity,” he said.

Swildens explained that venture managers must adapt: “Just going out and seeing companies, putting them in your fund, and then waiting for an IPO or strategic M&A exit probably won’t work anymore. [VCs] need to start working on alternative liquidity solutions.”

In April, he noted that at least five significant venture funds had hired full-time staff to develop non-traditional exits, including secondary transactions, continuation funds, and buyouts. “All the brand name funds are staffing and thinking through liquidity structures,” Swildens said.

Goldman Sachs is acquiring Industry Ventures to strengthen its $540 billion alternatives investment platform, identified as a key growth driver.

“Industry Ventures’ trusted relationships and venture capital expertise complement our existing investing franchises and expand opportunities for clients to access the fastest growing companies and sectors in the world,” Goldman CEO David Solomon said in a statement. “By combining the global resources of Goldman Sachs with the venture capital expertise of Industry Ventures, we are uniquely positioned to serve the increasingly complex needs of entrepreneurs, private technology companies, limited partners, and venture fund managers,” he added.

Industry Ventures reports that it has made more than 1,000 investments, holds stakes in over 700 venture firms, and boasts an internal rate of return of 18%.