Social Capital (venture capital) explained

Social Capital
Type:Private
Industry:Venture capital
Founders:Chamath Palihapitiya, Mamoon Hamid, Ted Maidenberg
Location:Palo Alto, California, United States
Products:Investments

Social Capital, formerly known as Social+Capital Partnership, is a venture capital firm based in Palo Alto, California. The firm specializes in technology startups, providing seed funding, venture capital, and private equity.[1]

The firm has "stood out strategically", according to Fortune, "with a focus on ... healthcare, financial services and education ... when those fields were ... neglected by the VC community."

History

Social Capital was founded in 2011 by Chamath Palihapitiya, who had previously worked at Facebook. Mamoon Hamid and Ted Maidenberg also joined the firm that year as General Partners.[2] [3]

In January 2015, Fortune reported that Kleiner Perkins was in acquisition talks with Social Capital,[4] but the acquisition reportedly fell through.[5] In May 2015, Social Capital raised $600 million in their third and largest venture capital fund.[6] PayPal cofounder Peter Thiel praised Palihapitiya's approach, and as of 2015 served as a limited partner.[7] [8]

In 2017, Marc Mezvinsky joined Social Capital as vice chairman as it sought to expand beyond traditional venture capital.[9]

In August 2017, Hamid left Social Capital to join Kleiner Perkins as a general partner and managing member.[10]

In spring of 2018, Mezvinsky departed Social Capital. Later in 2018, then-partners Arjun Sethi, Jonathan Hsu, and Ted Maidenberg left the firm to co-found Tribe Capital.[11]

In March 2024, Social Capital fired two of its senior partners, Jay Zaveri and Ravi Tanuku, over fundraising capital in the form of a special purpose vehicle for a startup that is part of their existing investment portfolio, purportedly without the knowledge of Palihapitiya. Several Social Capital employees participated including the firm's General Counsel.[12] [13] As of March 2024, Mr. Palihapitiya is the sole investing partner remaining at Social Capital according to Pitchbook records. [14]

Investments

Social Capital invested in Yammer in 2011, which was later bought by Microsoft. In 2012, the firm invested in Impermium, which was acquired by Google in 2014.[15] Also in 2012, the firm was a venture investor in InstaEDU, acquired by Chegg in 2014. Social Capital led a round of Series B funding for Wave Accounting. In 2014, Social Capital also invested in LotusFlare.[16]

In May 2015, the firm was a leading investor in a funding round for Slack Technologies.[17]

Through 2016 and 2017, the firm began a Discover program led by Jay Zaveri to make several investments in climate-related companies UrbanFootprint,[18] Saildrone,[19] Beyond the Dome, and DroneSeed,[20] telecom infrastructure company Eridan,[21] and space technology companies Swarm Technologies[22] and Relativity Space.[23]

In September 2020, their SPAC IPOB merged with Opendoor Technologies with a market cap of $4.8 billion.[24]

Notes and References

  1. News: de la MERCED. MICHAEL J.. Silicon Valley Investment Funds Still Lack Diversity, Study Shows. New York Times. 6 October 2015 . 23 October 2015.
  2. News: Facebook VP Chamath Palihapitiya Forms New Venture Fund, The Social+Capital Partnership. Arrington. Michael. TechCrunch. 2011-06-03. 2013-04-23.
  3. Web site: Kim. Eugene. These Two Charts Explain Why Kleiner Perkins Wanted To Buy This Four-Year-Old VC Firm. Business Insider. 9 October 2015.
  4. Exclusive: Kleiner Perkins tried to 'acquire' Social+Capital Partnership. Primack. Dan. Fortune. January 26, 2015. July 8, 2015.
  5. News: Why The Kleiner Perkins-Social+Capital Deal Fell Apart. Lynley. Matthew. March 31, 2015. July 8, 2015. TechCrunch.
  6. Web site: Rao. Leena. Is Social+Capital's Chamath Palihapitiya the future of venture capital?. Fortune. 9 October 2015.
  7. Web site: Social+Capital, the League of Extraordinarily Rich Gentlemen. https://web.archive.org/web/20120728023036/http://www.businessweek.com/articles/2012-07-26/social-plus-capital-the-league-of-extraordinarily-rich-gentlemen. dead. July 28, 2012. Bennett. Drake. 2012-07-26. 2013-04-23.
  8. News: Bennett. Drake. Social+Capital, the League of Extraordinarily Rich Gentlemen. Bloomberg. 27 July 2012 . 9 October 2015.
  9. https://www.bloomberg.com/news/articles/2017-05-19/chelsea-clinton-s-husband-joins-silicon-valley-firm-social-capital Chelsea Clinton's Husband Joins Silicon Valley Firm Social Capital
  10. Web site: Mamoon Hamid to Join Kleiner Perkins as General Partner . . https://web.archive.org/web/20221020174652/https://www.wsj.com/articles/mamoon-hamid-to-join-kleiner-perkins-as-general-partner-1501800217 . 2022-10-20 . live .
  11. Web site: Former Social Capital Partners Make First Investment Since Exit. Verhage. Julie. 16 August 2018. Bloomberg L.P.. 5 February 2019.
  12. News: Chapman . Lizette . March 15, 2024 . Social Capital AI Startup Deal Led Palihapitiya to Fire Partners . Bloomberg News . https://archive.today/20240318225027/https://www.bloomberg.com/news/articles/2024-03-15/social-capital-ai-startup-deal-led-palihapitiya-to-fire-partners . March 18, 2024 . live.
  13. News: Kinder . Tabby . March 14, 2024 . Sacked Social Capital partners push back on dismissal over AI investment . Financial Times . https://archive.today/20240314193049/https://www.ft.com/content/ee1adcee-6114-42cf-95d0-38e70a940f16 . March 14, 2024 . live.
  14. Web site: Social Capital Overview.
  15. Web site: Shontell. Alyson. That Big Round Ex-Yahoos Were Raising? It Closed And Here Are The Details. Business Insider. 26 August 2015.
  16. Web site: Corporate Strategy Intern. Workbound. September 2, 2021.
  17. Web site: Slack Is Our Company of the Year. Here's Why Everybody's Talking About It. Inc. Jeff Bercovici. December 2015. February 7, 2018.
  18. Web site: This SimCity-Like Tool Lets Urban Planners See The Potential Impact Of Their Ideas. Fast Company. Adele Peters.
  19. Saildrone Inc. Raises $14 Million In Series A Funding To Expand Its Fleet Of Sailing Drones And Ocean Data Services. 5 Sep 2016.
  20. Web site: That night, a forest flew. Techcrunch. Devin Coldewey. 26 November 2018.
  21. Web site: Eridan launches the world's first fully digital 5G radio. 14 February 2020.
  22. Web site: Satellite Startup Swarm Raises $25 Million For Space-Based Internet Plan. Fortune. Aaron Pressman.
  23. News: Boyle . Alan . Relativity Space lifts the curtain on its plan to make rockets with robotic 3-D printer . GeekWire.
  24. News: 2020-09-15. Opendoor to go public in Social Capital merger in $4.8 billion deal. en. Reuters. 2021-02-09.

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