Khosla Ventures Explained

Khosla Ventures
Type:Private
Founder:Vinod Khosla
Location:Menlo Park, California, U.S.
Industry:Venture capital
Products:Investments
Assets:$15 billion (October 2021)

Khosla Ventures is an American venture capital firm founded by Vinod Khosla, focused on early-stage companies in the Internet, computing, mobile, financial services, agriculture, healthcare and clean technology sectors. Some of its most successful investments include Affirm, DoorDash, Square, Impossible Foods, Instacart, and OpenAI.[1]

History

The firm was founded in 2004 by Vinod Khosla, a former general partner of Kleiner Perkins.[2] The firm's first two investment vehicles were funded with Khosla's own personal capital and were not open to institutional investors. In March 2009, Pierre Lamond became General Partner.[3] In December 2009, Khosla completed fundraising for two new funds, to invest in cleantech and information technology start-ups.

Khosla Ventures Fund III secured $1 billion of investor commitments to invest in traditional early stage and growth stage companies. Khosla also raised $300 million for Khosla Seed, which will invest in higher-risk opportunities and science experiments.[4] The firm has invested in bio-refineries for energy and bioplastics, solar, wind, battery, engines, LED, HVAC efficiency and other environmentally friendly technologies.[5] [6]

, Khosla Ventures was one of the five largest and most active investors in the space sector, which has had over of private capital invested in it since 2005.[7]

In September 2017, Khosla Ventures had about $5 billion in assets under management.[8]

In October 2021, Khosla Ventures announced that it had raised $1.4 billion in funding to invest in early-to-late stage startups, breaking down to $400 million for seed deals and $1 billion for later-stage companies. The fund has incubated several companies including QuantumScape and NextVivo.[9]

In January 2022, Khosla Ventures raised $557 million in its first opportunity fund.[10]

The firm closed $3.1 billion in new capital across three funds as of November 2023 including $1 billion for later-stage companies, $500 million for seed-stage companies and $1.6 billion for its eighth flagship fund. It was the largest fundraiser by a venture capital firm that year. Khosla Ventures stated that the funding would be used for nuclear fusion, humanoid robots and artificial intelligence to support industries such as healthcare and transportation.[11] [12]

Investments

Khosla Ventures has invested in several enterprise companies including Okta, valued at $27 billion as of August 2020, RingCentral, valued at $23.5 billion as of May 2021, along with others including Nutanix, ThoughtSpot and Rubrik. Khosla investments into transportation include Hermeus, Waabi, and Glydways.[13] [14]

In October 2021, DevOps platform provider GitLab raised $801 million in its initial public offering. Khosla Ventures led the seed round in 2015 and reportedly made more than 150 times return on its investment.[15]

Khosla Ventures has also made numerous healthcare investments including Guardant Health.[16] Many of Khosla's healthcare investments are based on his belief that artificial intelligence will allow for safer and cheaper healthcare.[17] The companies include Color Genomics, a genetic testing service, Oscar Health, a tech enabled health insurance, Sword Health, which provides virtual MSK care, and Cellino which is known for its drug discovery.[18] [19] Khosla Ventures was the first venture capital investor of Impossible Foods, investing $3 million in 2011.

Affirm, a financial technology company, raised $1.2 billion in its initial public offering, which was the largest U.S. filing of the year to date. The firm was its first venture capital investor.[20] In October 2021, Khosla Ventures announced that it had raised $1.4 billion in funding to invest in early-to-late stage startups breaking down to $400 million for seed deals and $1 billion for later-stage companies.[21]

Khosla Ventures is also known for being the first investors in the corporate entity of OpenAI.

Notable investments include Academia.edu,[22] Berkshire Grey,[23] DoorDash,[24] Faire,[25] Hermeus,[26] Impossible Foods,[27] Instacart,[28] Opendoor,[29] Square,[30] Stripe,[31] Vectra Networks Inc.[32] and Velo3d.[33]

Programs and partnerships

In February 2021, Khosla Ventures filed plans for the public offerings of three special-purpose acquisition companies (SPAC), which intend to raise a total of $1.2 billion for the purpose of acquiring and taking public three private companies.[34] Through a Khosla-backed SPAC, Nextdoor began trading under the ticker KIND in November 2021 with a $4.3 billion valuation. By August 2023 KIND's market cap had fallen to about $810 million.[35]

References

External links

Notes and References

  1. Web site: Lacy, Sarah . July 3, 2009 . Vinod Khosla, Risk Junkie . TechCrunch.
  2. News: 2017-11-28 . Khosla Ventures Founder Vinod Khosla Joins Slush 2017 - Slush 2017 . en-US . Slush 2017 . 2018-01-07.
  3. News: Marshall . Matt . 3 March 2009 . Pierre Lamond, the VC who scared the YouTube guys, joins Khosla . VentureBeat . 8 January 2011.
  4. http://news.cnet.com/8301-11128_3-10323028-54.html Khosla Ventures piles up $1 billion for green tech
  5. https://www.nytimes.com/2009/09/01/business/01khosla.html Venture Firm’s ‘Green’ Funds Top $1 Billion
  6. Web site: Wauters, Robin . May 19, 2011 . Khosla Ventures Is Raising, Like, A Billion Dollars . TechCrunch.
  7. News: Nordrum . Amy . 2015-10-09 . Space Advocate Makes Business Case For Private Company Exploration Of Extraterrestrial Resources . International Business Times . 2015-10-10.
  8. Web site: Kolodny . Lora . 2017-09-07 . Khosla Ventures adds women to investment team — Simmons and Gulati . 2018-12-18 . www.cnbc.com.
  9. Web site: Cheng . Candy . Khosla Ventures has raised a new $1.4 billion fund to back startup winners like DoorDash, Stripe, and Square . . https://archive.today/20211026222358/https://www.businessinsider.com/khosla-ventures-raises-14-billion-to-back-technology-startups-2021-10 . October 26, 2021 . November 16, 2021 . live .
  10. https://www.axios.com/2022/01/06/exclusive-khosla-ventures-raises-its-first-opportunities-fund Exclusive: Khosla Ventures raises its first opportunities fund
  11. News: 14 November 2024. WSJ.com. Jin, Berber. Early OpenAI Investor Khosla Ventures Closes In on $3 Billion for Venture Funds.
  12. News: 9 January 2024. Forbes.com. Konrad, Alex. Keith Rabois Makes A Surprise Return To Khosla Ventures, Five Years After Joining Founders Fund.
  13. https://www.forbes.com/sites/noahkirsch/2020/08/27/new-billionaire-todd-mckinnons-cloud-security-company-is-booming-as-more-americans-work-from-home/?sh=4d670d6d3555 New Billionaire: Todd McKinnon's Cloud Security Company Is Booming As More Americans Work From Home
  14. https://www.macrotrends.net/stocks/charts/RNG/ringcentral/net-worth Ringcentral Net Worth 2011-2021
  15. https://www.bloomberg.com/news/articles/2021-10-14/gitlab-exceeds-ipo-target-price-to-raise-801-million Gitlab Exceeds IPO Target Price to Raise $801 Million
  16. https://www.bizjournals.com/sanfrancisco/news/2018/09/08/biotech-ipo-guardant-health-kodiak-liquid-biopsy.html Two more Peninsula IPOs tell the story of biotech's investment boom
  17. https://www.businessinsider.com/vinod-khosla-healthcare-ai-treat-disease-future-system-2021-1 Billionaire investor Vinod Khosla says healthcare's biggest problems can be solved with AI. Here's his vision for 2030's healthcare system
  18. https://www.businessinsider.com/genetics-test-for-cancer-cholesterol-2018-5 A 23andMe competitor just launched its own cancer testing initiative — but it differs in a key way
  19. https://www.businessinsider.com/oscar-health-who-got-rich-2021-2 Josh Kushner stands to make a mint on Oscar Health's much-awaited IPO, and has almost total control. Here are the venture investors who will also do well
  20. Web site: Reuters. Affirm Holdings prices U.S. IPO above target range, raises $1.2 billion. 12 January 2021.
  21. https://www.businessinsider.com/khosla-ventures-raises-14-billion-to-back-technology-startups-2021 Khosla Ventures has raised a new $1.4 billion fund to back startup winners like DoorDash, Stripe, and Square
  22. https://www.finsmes.com/2013/09/academia-edu-raises-11-1m-series-funding.html Academia.edu Raises $11.1M in Series B Funding
  23. https://techcrunch.com/2020/01/21/as-retail-robotics-heats-up-berkshire-grey-raises-263m/ As retail robotics heats up, Berkshire Grey raises $263M
  24. News: 2016-03-22 . BRIEF-DoorDash raised $127 million in series C round of financing -... . en . Reuters . 2019-06-27.
  25. https://www.reuters.com/legal/transactional/online-marketplace-faires-400-mln-funding-lifts-valuation-124-bln-2021-11-16/ Online marketplace Faire's $400 mln funding lifts valuation to $12.4 bln
  26. https://www.cnbc.com/2022/03/10/hypersonic-aircraft-startup-hermeus-raises-100-million.html Hypersonic aircraft start-up Hermeus raises $100 million to finish prototype, build out fleet
  27. Web site: Loizos . Connie . 2015-10-07 . Impossible Foods Raises a Whopping $108 Million For Its Plant-Based Burgers . 2022-09-10 . TechCrunch . en-US.
  28. https://www.inc.com/graham-winfrey/instacart-vc-round-44-million.html Why VCs Gave Instacart Another $44 Million
  29. https://therealdeal.com/national/2021/01/11/who-made-bank-in-opendoors-ipo-100m-for-a-visitor-logbook-firm-inbox/ Who made bank in Opendoor’s IPO? $100M for a visitor logbook firm Inbox
  30. https://www.cnbc.com/2015/11/09/square-ipo-will-net-big-win-for-one-firm.html On paper, Khosla’s firm could net a massive return on Square IPO
  31. https://www.bizjournals.com/sanfrancisco/blog/2014/01/stripe-paypal-payments-khosla-musk-thiel.html Stripe raises $80 million, pushing payments company's valuation above $1 billion
  32. Web site: 2018-02-21 . Vectra raises $36 million for its AI cybersecurity technology . 2018-04-16 . en-US.
  33. https://techcrunch.com/2020/04/28/velo3d-a-supplier-of-3d-printers-to-spacex-raises-28-million/ Velo3D, a supplier of 3D printers to SpaceX, raises $28 million
  34. News: Schubarth . Cromwell . Khosla Ventures gets into the SPAC boom with plans to raise $1.2B in 3 IPOs . 9 March 2021 . Silicon Valley Business Journal . 13 February 2021.
  35. Web site: Nextdoor Holdings, Inc. (KIND) . finance.yahoo.com.

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