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 Big-box retailer Best Buy Co. (NYSE:BBY) is bankrolling a new digital media venture capital fund to be managed by Velocity Interactive Group (which will soon be renamed Fuse Capital).According to a New York Times blog post, the fund's management team will be stacked with plenty of tech heavyweights including Ross Levinsohn, the former head of digital for News Corp.; Jonathan Miller, the current head of digital for News Corp. and former CEO of America Online; as well as former comVentures partners. While the investors aren't spilling the beans on the fund's size, they do say the fund will target digital media and communications startups, especially those developing games, mobile applications, photo and music sharing, online video and personal media management, all of which are right up Best Buy's alley. The new fund signals Best Buy's efforts to double-down on venture capital at a time when the sector is seeing dealflow fall mightily. The company's own corporate venture fund -- Best Buy Capital -- has been up and running since last year. In March 2008, The Deal's Olaf de Senerpont Domis wrote that Best Buy Capital was set up with two thrusts: "a program ('Core Fund') supporting investment opportunities for current business units consistent with our past investment activities; and a new strategic initiative ('Alpha Fund'), which provides a market-based mechanism for Best Buy to proactively participate in and encourage consumer innovations and disruptions by making direct investments in companies that are early on in its life cycle." In January, Best Buy Capital led a $10 million fourth round in IMVU, a provider of virtual rooms for teenagers. Best Buy isn't the only one handing out money to other venture vehicles. Funds-of-funds have been gathering up plenty of money as well. Over the past two months, fund-of-funds managers have closed on roughly $5.1 billion in fresh capital to invest in private equity, venture capital and real estate vehicles. Additionally, three firms have reportedly begun raising around $2 billion for the sector in recent weeks. See Dealscape post on fund-of-funds. - George White See NY Times post on new fund See Dealscape post on Best Buy Capital
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