Maverick Ventures founder David Singer has a third fund to invest in companies like OneMedical and Coupang.
Maverick VenturesFresh off investment success with South Korean e-commerce giant Coupang, Maverick Ventures partner David Singer says he feels conflicted now when the phone rings to ask about his firm’s less typical structure, the evergreen fund.
“You’re sort of caught betwixt and between, because this is our special sauce, our competitive advantage, but you also want to be good members of a community,” Singer says.
Evergreen funds, open-ended investment vehicles without a use-by date, are almost as old as Silicon Valley. But few firms have kept up the practice over decades, the most notable exception Singer’s old backer and inspiration, Sutter Hill Ventures. But Maverick Ventures is doubling down on the practice with its third fund, a $600 million vehicle.
Details of the new fund were first reported in the Midas Touch newsletter on Saturday.
Based in San Francisco, Singer launched Maverick Ventures as the venture arm of hedge fund Maverick Capital, a “Tiger Cub” firm founded by Tiger Management alum Lee Ainslie, in 2004. A three-time entrepreneur, Singer previously founded a business in the health and bio category, Corcept Therapeutics, that Sutter Hill invested in. (Corcept still trades on Nasdaq today, with a market capitalization of $2.6 billion.) For Maverick’s venture arm, Singer says he considered an evergreen fund the superior kind for its long time horizons and promise of follow-on capital. In fact, Maverick has purchased stakes from fellow investors in its portfolio companies in the past who face pressure to deliver returns to limited partners, he says.
“If I look at our biggest winners, OneMedical, we were there very early and I’m still on the board over a decade later; Coupang, we were there for a decade. And they went faster than we expected,” says Singer.
The Maverick Ventures team pre-pandemic.
Maverick VenturesGiven Singer’s own background, it’s no surprise that Maverick Ventures has invested heavily in healthcare in the past, and an area of focus for fellow investor Ambar Bhattacharyya. E-commerce, where the firm held more than 6% of Coupang, a stake worth more than $5 billion at IPO, has been a focus since the company backed Fresh Direct fourteen years ago. Maverick only sold its stake in January. The firm also invests in security software, a specialty of investor Matthew Kinsella. (An all-male investment team right now, Maverick Ventures’ first woman investor starts in a few weeks, according to Singer.)
“We’re extremely curious about personalized medicine, and proteomics [the study of proteins], we have a couple of stealth companies in gene editing,” Singer says. “We’ve been doing digital health for a decade, but it really is at an inflection point, and we’re continuing to look there.”
Another Maverick investment: Snapdocs, a software provider for closing mortgages and digital loans. The San Francisco-based startup has quietly raised $150 million in a new funding round led by Tiger Global, Tiger’s private equity arm, two sources told Forbes via the Midas Touch newsletter. Tiger Global declined to comment; Snapdocs did not respond to a request for comment. Maverick didn’t comment on the funding either, but before the news, Singer said of the company: “the digital transformation of legacy industries continues.”
Other Maverick portfolio companies include Israeli privacy startup D-ID; 1MG, an India-based online pharmacy; Cityblock Health, which raised $192 million in March; insurance unicorn Collective Health and Hims & Hers, which went public via a SPAC in January.
While Maverick Ventures’ third fund is larger than its previous, which clocked in at $382 million just two years ago, Singer says the firm will continue to focus on early-stage and incubated investments, even in what might prove a frothy environment for such deals when it comes to valuations. “If interest rates go up and the valuations and multiples of the private markets go down, the one constant is going to be great entrepreneurs,” Singer says.
The Link LonkApril 13, 2021 at 01:04AM
https://www.forbes.com/sites/alexkonrad/2021/04/12/maverick-ventures-600m-third-evergreen-fund/
Fresh Off Coupang Exit, Maverick Ventures Adds $600 Million Third Evergreen Fund - Forbes
https://news.google.com/search?q=fresh&hl=en-US&gl=US&ceid=US:en
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