Battery Ventures,  the now 37-year-old investment firm, just closed on two new funds that — at $2 billion in capital commitments — nearly double the record-breaking $1.2 billion that the firm closed on exactly two years ago.

It sounds very typical of the broader trend in recent years of firms that rush back to market every two years and lock down ever greater capital commitments as they go.

But General Partner Chelsea Stoner insists the firm’s newest funds — a $1.2 billion flagship fund (its 12th), and another $800 million companion vehicle —  reflects the firm’s determination to slow down its pace of fundraising. “Our last fund we deployed in two years  and we want to get back to [fundraising every] two-and-a-half to three years,” Stoner explained in a call yesterday about Battery’s new vehicles and how they might be invested.

More from our chat follows.

TC: Battery just raised a lot of capital. What’s going on?

CS: Not a whole lot is changing on our end. We have the same 10 general partners. We’re seeing tons of opportunities. We don’t foresee check sizes increasing. The fund size is more a function of those opportunities and wanting to get back to [a longer window between fundraising].

TC: I did see a promotion, Zack Smotherman, who joined Battery in 2013 and was named a partner with this new fund.

CS: I think you know we’re really big on promoting from within. He started as a VP, then was a principal for the last few years. He isn’t a GP, but he’s on track to become a GP over time.

TC: How many of you are focused on earlier-stage versus later-stage versus buyout deals, and how is the capital divided up?

CS: A lot of us tend to focus on one or two of those core areas, A GP might tend to look at early-stage and growth deals, or else growth and buyout deals. It’s sort of amorphous. Ideally, a third of our capital goes to each area; that’s the goal.

TC: Battery is thematically driven; what are some of the themes the firm is focused on in 2020?

CS: A lot of them center on cloud computing. We still feel like we’re in the middle innings of innovation change away from on-premise technologies, and that has spurred more vertically focused software to crop up [all over the place]. I’m on planes quite a bit and looking at geographies outside of Silicon Valley, and we’re seeing really interesting companies in Phoenix (Az.), Burlington (Vt.), Madison (Wi.), and Bainbridge Island (Wa.), among other spots.

Where see see a lot of opportunity in the healthcare space, for example, is on the aging population. We all know there are tailwinds there and some really interesting technologies that are being applied to a variety of areas. BrightTree [a cloud-based healthcare IT company that sold software and services to home medical equipment companies and pharmacies], which was acquired by [medical device maker] ResMed [in 2016], is an example.

TC: Battery is very focused on finding and funding ‘market leaders.’ Given that the firm funds at companies at such different stages, across numerous geographies, how does it sift through every business in a particular vertical to make a determination about which will win?

CS: We’re very research intensive. We’ll pick a theme like the aging population, then go segment by segment, [poring over] potential technologies and areas of care that this population will need. From the beginning, we have an intensive sourcing model with analysts and associates who spend most of their time doing this kind of research, including cold calling, conducting online research, talking with industry participants about who they think the up-and comers-are, what kinds of software folks are using.

It’s a lot of different data that we’re collating, but we also want to get in front of these companies and have face-to-face meetings with them and understand what their key growth vectors. Then we bring it all together and assess who we think is the category leader, and what we need to do to partner with them.

Sometimes it takes years. Sometimes, companies don’t need our capital. It’s extremely competitive, especially when company is already profitable.

TC: How do you persuade a growing, profitable company that it needs your money?

CS: It’s a lot of strategy work, consulting work. You identify for for them that, ‘This product would go well with an interesting acquisition [candidate] that has this product.’ We explain that, ‘This is what we’ve seen work in other situations,’ whether it’s developing certain kinds of products or maybe accepting payments. CEOs and founders don’t have benefit of seeing other companies and entrepreneurs and [knowing well] things that have worked and don’t work.

TC: How much capital are you investing outside of the U.S. and where?

CS: We opened an office in London four years ago after we’d tiptoed our way in. We’d been doing deals over there mostly on the buyout side, out of our Boston office, and just decided that there were so many opportunities that we [dove in]. We’re also doing a lot of out of our Israel office, which we opened 12 or 13 years ago. So between those two offices, we’re doing a lot in Europe, from early-stage consumer [deals] in Berlin to cloud investing.

A lot of themes we’ve seen play out here in cloud land, we’re starting to see take shape over there. [Europe] is a little further behind in terms of cloud adoption.

TC: You mentioned the market being extremely competitive. Where is it more extreme — on the early-stage or later-stage deals?

CS: All of the above, if we’re being honest. It’s no secret that growth-stage investing has become very competitive. That’s been true for the last five-plus years as more public market investors have gotten into the space. But every stage is very competitive, and you need to bring a competitive lens to deals.

TC: Would you say Battery is price sensitive?

CS: When it’s the market leader, no. It really goes back to doing your work, You have to get that right (the category leader), but we think most markets in the land of business-to-business software are winner take all or, at at most, sometimes there’s two winners [that accrue] most of the equity value. So it’s critical to figure out that category leader.

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