fb-pixelBattery Ventures plans move to Boston - The Boston Globe Skip to main content

Battery Ventures plans move to Boston

Wherever tech entrepreneurs go, the money follows.

So as start-up executives increasingly gravitate toward city blocks and not suburban office parks for their new digs, so too are venture capital firms now flocking to Cambridge and Boston.

The latest to disclose a move is Battery Ventures, one of the area's oldest and biggest firms, and a resident of the section of Waltham sometimes called "Money Hill," for all the venture capital firms once located there. Battery has signed a letter of intent for office space at the Fan Pier development on the South Boston Waterfront, and would become the first major venture capital firm to set roots in a neighborhood Mayor Thomas M. Menino has dubbed the Innovation District.

Advertisement



In the past few years, at least seven other venture capital firms have moved to Cambridge or Boston from the western suburbs, as the center of gravity of the region's technology community has shifted from the routes 128-495 ring to Kendall Square and the Innovation District.

"We are seeing some pretty interesting things going on in Boston in general, and specifically around the Innovation District," said Dave Tabors, a general partner at Battery Ventures. The firm is still negotiating a lease at One Marina Park Drive and doesn't expect to move until late next year.

Tabors said that as more start-ups and tech workers are staying in Boston and Cambridge, it makes sense for his firm, which started in the city's Financial District in 1983 to be nearby, too. Plus, he added, getting to the airport is a lot easier from South Boston than from Waltham.

"Asking people to fly in and take a $75 cab ride to Waltham is a challenge," he said.

Battery Ventures has funded successful outings such as as Akamai Technologies Inc., Groupon Inc., and more recently, fast-growing Boston online retailer Wayfair LLC. Its current investment fund is $750 million and it has raised $5 billion over its history.

Advertisement



Like many other firms that started in Boston decades ago, Battery moved to the suburbs in the 1990s as the technology economy was booming along Route 128 and farther afield in towns such as Westford and Chelmsford.

Eventually, Winter Street in Waltham became the hub for venture capitalists who seeded the development of promising software, biotech, and communications companies in hopes their investments would pay off when those firms were acquired or went public: Greylock Partners, Atlas Venture, Charles River Ventures, Matrix Partners, North Bridge Venture Partners, and Polaris Venture Partners.

Now, the reverse is true.

"If the entrepreneur is going to be in Cambridge and Boston, the VC firm is going to be there, too," said Jeff Bussgang, general partner of Boston's Flybridge Capital Partners.

All but North Bridge and Polaris have either left Waltham or plan to. North Bridge would not comment while at Polaris, spokesman John Lacey noted his firm opened a satellite in Kendall Square in 2009, the incubator program called Dogpatch Labs that offers free office space and Internet connections for start-ups. Polaris also has plans to further expand in Cambridge, Lacey said.

And whether in Boston, New York, or Silicon Valley, venture capitalists compete with one another for the hottest tech companies, and need to network with those entrepreneurs at events in the city or even at the coffee shops that serve as makeshift offices, said C.A. Webb, executive director of the New England Venture Capital Association.

Advertisement



"The nature of technology start-ups has really changed over the past 10 years," Webb said. "The profile of the entrepreneur who can get into the game has skewed younger and younger, and young folks live in the city."

Most recent Massachusetts Institute of Technology or Harvard University graduates who are starting an Internet company aren't hanging around Waltham. "They don't have the social network out in the suburbs that would lead them to any of the venture firms on 128," Webb said.

The urban shift is happening elsewhere — in California, where Twitter Inc. and Zynga Inc. expanded in San Francisco instead of more the traditional Palo Alto or Menlo Park. In November, one of California's biggest Silicon Valley venture capital firms, Kleiner Perkins Caufield & Byers, opened an office in downtown San Francisco.

Battery Ventures is deviating in one respect from its close-by competitors, in that it chose Boston over Cambridge, where firms such as Charles River Ventures and Atlas Venture have recently moved.

"The heart and soul of the start-up ecosystem is focused on Cambridge, but there's a new energy in Boston," said Roy Hirshland, president of T3 Advisors, a real estate advisory firm in Waltham that worked with Battery Ventures.

In fact, the South Boston Waterfront is undergoing a rapid transformation with new office towers, condos, and lab space planned for the waterfront neighborhood renamed the Innovation District by Menino to attract high-tech tenants. Recently the car sharing company Zipcar Inc. and the growing software company LogMeIn Inc. inked deals to move there.

Advertisement



"Battery Ventures is a company that invests in risk, but when they choose the waterfront area of our city they are betting on a sure thing, and we look forward to welcoming them to their new home soon," Menino said in a statement.

The suburbs still have some hold on the tech community. Indeed, start-ups are still taking root there and some of the area's stalwarts, such as e-mail marketer Constant Contact Inc. in Waltham or speech recognition company Nuance Communications Inc. in Burlington, are growing along 128.

"It's by no means dead," Webb said the suburban tech belt. "But if you are looking for early stage and seed opportunities, you've got to be in the city."


Michael B. Farrell can be reached at michael.farrell@globe.com.