Xfund

Last updated
Xfund
FormationJanuary 27, 2012;11 years ago (2012-01-27) in Cambridge, Massachusetts as The Experiment Fund
Founders Patrick Chung, Hugo Van Vuuren [1] [2]
Type Private
Headquarters Cambridge, Massachusetts and Palo Alto, California, United States
ServicesEarly stage venture capital
FieldsConsumer technology
Enterprise technology
Healthcare
Key people
Patrick Chung
Brandon Farwell
Website xfund.com

Xfund is an American venture capital firm with offices in Palo Alto, California and Cambridge, Massachusetts. [3] It provides early-stage venture capital to entrepreneurs across multiple disciplines. [4] [5] Xfund was founded as the Experiment Fund in 2012 as a partnership between the venture capital companies New Enterprise Associates, Accel Partners, Breyer Capital, and Polaris Partners. [6] [5] [7] Anchored at Harvard University’s School of Engineering and Applied Sciences (SEAS), it was established to make seed-stage investments in startups developed at Harvard and MIT, [6] [5] [7] although the fund has been open to all founders regardless of university affiliation from the start. [8] In 2014 the fund formally renamed itself Xfund (an abbreviation of "Experiment Fund"), and raised $100 million in a second fund, Xfund 2. [6] [5] [7] A third fund in 2020 raised $120 million. [9] [10] The first investor in most of its portfolio companies, [10] Xfund's partners have invested companies such as 23andMe, Kensho, [4] [5] Gusto, Plaid, Robinhood, Patreon, Andela, [11] [12] and Philo. [13]

Contents

History

Founding (2012-2014)

The Experiment Fund was launched in January 2012 as a $10 million seed fund and incubator designed specifically to support student start-ups and develop technologies and platforms created in Cambridge, Massachusetts. [6] Although anchored at Harvard's School of Engineering and Applied Sciences, [6] [5] [7] the fund was made open to all founders regardless of university affiliation from the start. [8] It was initially run with Patrick Chung representing New Enterprise Associates (NEA)'s interests and Hugo Van Vuuren as the fund's "on the ground" person in Cambridge. [7] [13] Early advisors included Harvard faculty members David Edwards, [14] Harry Lewis, Cherry Murray, [15] and John Palfrey, in addition to Facebook co-founder Andrew McCollum, [16] Jim Breyer, and NEA's Harry Weller. [15] To avoid potential conflicts of interest, Harvard had no financial stake in the Experiment Fund. [6] [8]

In June 2012, Accel Partners, Breyer Capital, and Polaris Venture Partners joined NEA as investors. [16] Experiment Fund identified around 3500 investment opportunities in its first two years. [17] Of that number, it evaluated 900 companies and invested in five, [18] including Philo, Zumper, [13] Kensho, and Ravel Law. [1] The average markup of the portfolio from seed valuation to valuation in May 2014 was over 10x. [18] Approximately 40% of the deal-flow in the original fund came from companies launched by Harvard students, faculty and staff, [19] while 25% came from MIT-affiliated entrepreneurs and 9% from Stanford University. [17] [13] [16] In May 2014, Patrick Chung joined The Experiment Fund full-time. [20]

Recent history (2014-2021)

In December 2014, the fund raised $100 million in capital commitments for a second fund, which was officially renamed Xfund. [20] [21] [22] Among Xfund's limited partners were Goldman Sachs, Saudi Aramco, Jasper Ridge and Breyer Capital. [5] Still based at Harvard, [22] by 2015, the company had considered 3,500 investments [17] and made 10. [4] In January 2016, Van Vuuren contacted Xfund's Limited Partners Advisory Committee (LPAC) and accused Chung of mismanagement in the firing of an employee. Separately, Chung contacted the LPAC requesting intervention and raised questions about Van Vuuren's stability. In March 2016, the LPAC voted to keep Chung in charge as managing partner and remove Van Vuuren entirely from the fund's affairs. [7] Van Vuuren sued Xfund and Chung in May 2016, [23] alleging fraud, breach of fiduciary duty, defamation, and a violation of California's two-party consent law. [7] [24] [25] The case was privately settled in February 2017. [7] [2] Brandon Farwell, formerly of DFJ and RV, subsequently joined Xfund as a partner in 2017. [2] With all original investors remaining involved, [7] Chung and Farwell invested in companies such as Zumper, [13] 23andMe, and Landit, among others. [4] [5]

In 2020, Xfund announced its third fund, Xfund 3. [9] [10] Originally intending to raise $100 million, [10] it was oversubscribed and accepted $120 million in commitments, with the fund led by NEA and Breyer Capital. [10] [26] At the time, in contrast to venture funding at large where 3% of funding goes to female-led companies, by September 2020, "one-third of Xfund’s capital [was] invested in companies with women founder/CEOs, and 72 percent of the firm’s capital backs companies led by women, minorities, or immigrants." [10] Also, startups from Harvard comprised "about 25 percent of Xfund’s investments, with 20 percent coming from MIT, 10 percent from Stanford and another 7 percent from University of California, Berkeley. [27] As the first investor in most of its portfolio companies, by 2020 the company had also invested in Curebase, Natalist, AeroVect, [10] Segment, Guideline, [11] [12] NewtonX, [7] and Lighthouse. [28]

See also

Related Research Articles

<span class="mw-page-title-main">Venture capital</span> Form of private-equity financing

Venture capital is a form of private equity financing that is provided by venture capital firms or funds to startups, early-stage, and emerging companies that have been deemed to have high growth potential or which have demonstrated high growth. Venture capital firms or funds invest in these early-stage companies in exchange for equity, or an ownership stake. Venture capitalists take on the risk of financing risky start-ups in the hopes that some of the companies they support will become successful. Because startups face high uncertainty, VC investments have high rates of failure. The start-ups are usually based on an innovative technology or business model and they are usually from high technology industries, such as information technology (IT), clean technology or biotechnology.

Kleiner Perkins, formerly Kleiner Perkins Caufield & Byers (KPCB), is an American venture capital firm which specializes in investing in incubation, early stage and growth companies. Since its founding in 1972, the firm has backed entrepreneurs in over 900 ventures, including America Online, Amazon.com, Tandem Computers, Compaq, Electronic Arts, JD.com, Square, Genentech, Google, Netscape, Sun Microsystems, Nest, Palo Alto Networks, Synack, Snap, AppDynamics, and Twitter. By 2019 it had raised around $9 billion in 19 venture capital funds and four growth funds.

Sequoia Capital is an American venture capital firm headquartered in Menlo Park, California which specializes in seed stage, early stage, and growth stage investments in private companies across technology sectors. As of 2022, the firm had approximately US$85 billion in assets under management.

The Forbes Midas list is the annual ranking by Forbes magazine of the most influential and best-performing venture capital investors. Described by Kara Swisher as the "Oscars for venture capitalists in tech," the Midas List uses parameters that include the first-day market capitalization of IPOs and the opinions of a panel of experts.

<span class="mw-page-title-main">Accel (company)</span> Venture capital firm

Accel, formerly known as Accel Partners, is an American venture capital firm. Accel works with startups in seed, early and growth-stage investments. The company has offices in Palo Alto, California and San Francisco, California, with additional operating funds in London, India and China.

<span class="mw-page-title-main">Accel-KKR</span> American technology-focused private equity firm

Accel-KKR is an American technology-focused private equity firm with over $14 billion in total assets under management. The firm invests primarily in middle-market software and technology-enabled services businesses, providing capital for buyouts and growth investments across a range of opportunities, including recapitalization, divisional carve-outs, and going-private transactions. The company has offices in Menlo Park, California, (headquarters), Atlanta, Georgia, Mexico City, and London.

Lightspeed Venture Partners is an American venture capital firm focusing on multi-stage investments in the enterprise, consumer, and health sectors. Lightspeed invests in seed, early and growth-stage companies.

<span class="mw-page-title-main">GV (company)</span> Venture capital unit of Alphabet Inc.

GV Management Company, L.L.C. is a venture capital investment arm of Alphabet Inc., founded by Bill Maris, that provides seed, venture, and growth stage funding to technology companies. Founded as Google Ventures in 2009, the firm has operated independently of Google, Alphabet's search and advertising behemoth, since 2015. GV seeks to invest in startup companies in a variety of fields ranging from the Internet, software, and hardware to life science, healthcare, artificial intelligence, transportation, cyber security and agriculture.

<span class="mw-page-title-main">Jim Breyer</span> American venture capitalist (born 1961)

James W. Breyer is an American venture capitalist, founder and chief executive officer of Breyer Capital, an investment and venture philanthropy firm, and a former managing partner at Accel Partners, a venture capital firm. Breyer has invested in over 40 companies that have gone public or completed a merger, with some of these investments, including Facebook, earning over 100 times cost and many others over 25 times cost. On the Forbes 2021 list of the 400 richest Americans, he was ranked #389, with a net worth of US$2.9 billion.

<span class="mw-page-title-main">New Enterprise Associates</span> American Venture Capital firm

New Enterprise Associates (NEA) is an American-based venture capital firm. NEA focuses investment stages ranging from seed stage through growth stage across an array of industry sectors. With ~$25 billion in committed capital, NEA is one of the world's largest venture capital firms.

Clinkle was a mobile payments company founded in 2012. In 2013 they raised $25 million and the product launched to college students on September 24, 2014.

Birchbox is a New York City-based online monthly subscription service that sends its subscribers a box of four to five selected samples of makeup, or other beauty related products. The products include skincare items, perfumes, organic based products, and various other cosmetics.

Carwow, stylised as carwow, is an online marketplace for buying and selling new and used cars. It uses the reverse marketplace model to remove the need for customers to negotiate with dealers when buying or selling their cars. When buying a new car, users choose the car they would like to buy, along with the various specifications and features, and then receive offers direct from dealers. When selling a car, users upload some basic details about their car and then different car dealers are invited to bid to buy the car directly from them. It also provides information to prospective purchasers and gives feedback on rogue dealers. The company also has a YouTube page, run by motor journalist and carwow's Chief Content Officer Mat Watson, where different cars are reviewed.

For the sociological term, see Social capital.

Casper Sleep is an e-commerce company that sells sleep products online and in retail locations. Headquartered in New York City, the company has showrooms in New York City, Chicago, and elsewhere. Its mattresses are manufactured in Georgia and Pennsylvania.

Convergence Ventures is an Indonesia-based venture capital firm. The firm invests primarily in early stage funding in the emerging markets and startups which build technology products and internet services with a primary focus on Indonesia. The firm was founded by Adrian Li and joined by Partner Donald Wihardja in November 2014. The company manages a US$25 million fund with LPs from Indonesia, China and the US. As of 2019, Convergence Ventures has officially merged with Agaeti Ventures to become AC Ventures.

<span class="mw-page-title-main">Hugo Van Vuuren</span> South African entrepreneur and investor (born 1984)

Hugo Van Vuuren is a South African entrepreneur and investor. An expert-in-residence at the Harvard School of Engineering and Applied Sciences, he is the co-founder of Work-Bench, an early stage enterprise technology venture fund.

Grovo is a New York City–based technology company that provides a SaaS microlearning platform with a built-in tool for content creation.

<span class="mw-page-title-main">Philo (company)</span> American internet television company

Philo is an American internet television company currently based in San Francisco, California, that was first founded at Harvard University in 2010 by Tuan Ho and Nicholas Krasney. Investors in the company include HBO, Andrew McCollum, and Mark Cuban. The company and its service is named in honor of one of the pioneering engineers of television, Philo T. Farnsworth.

<span class="mw-page-title-main">ICONIQ Capital</span> American wealth management and investment firm

ICONIQ Capital is an American wealth management and investment firm based in San Francisco, California. It functions as a family office that provides wealth management services to high net worth clients such as Mark Zuckerberg, Sheryl Sandberg, Jack Dorsey and Jeff Weiner. The firm also is involved in investments related to Private Equity and Venture Capital.

References

  1. 1 2 Shu, Catherine (4 December 2014), Harvard-based Xfund Closes A $100M Second Fund, TechCrunch , retrieved 25 February 2021
  2. 1 2 3 Primack, Dan (October 6, 2017). "The return of Xfund". Axios. Retrieved 3 December 2017.
  3. ↑ "Xfund Contact" . Retrieved December 6, 2017.
  4. 1 2 3 4 Anders, George (September 28, 2015). "These VCs Bet $100 Million On Ideas With A Liberal Arts Twist". Forbes. Retrieved 3 December 2017.
  5. 1 2 3 4 5 6 7 8 Benner, Katie (May 6, 2016). "Infighting Threatens to Fell a Venture Capital Firm". New York Times. Retrieved 21 November 2017.
  6. 1 2 3 4 5 6 Farrell, Michael B. (September 9, 2013). "Harvard makes space for venture capitalist". The Boston Globe. Retrieved 20 November 2017.
  7. 1 2 3 4 5 6 7 8 9 10 Hempel, Jessi (November 8, 2017). "The Inside Story of Venture Capital's Messiest Breakup". Wired. Retrieved 21 November 2017.
  8. 1 2 3 "Early-stage venture fund launches". Harvard Gazette. January 27, 2012. Retrieved 21 November 2017.
  9. 1 2 Guo, Elizabeth (4 September 2020), Aiming to Spawn 'the Next Gates or Zuckerberg,' Harvard-Connected Venture Capital Firm Xfund Closes Latest Fund, United States: The Crimson, retrieved 21 February 2021
  10. 1 2 3 4 5 6 7 Karoff, Paul (3 September 2020), Xfund celebrates launch of new fund, Harvard SEAS, retrieved 21 February 2021
  11. 1 2 Portfolio, XFund, retrieved 25 February 2021
  12. 1 2 Founder Series: Launching a Startup and Raising Capital during the Pandemic with Xfund, XFund, retrieved 25 February 2021
  13. 1 2 3 4 5 Wu, Victor C. (April 25, 2013). "Partners Reflect on Experiment Fund's First Year". Harvard Crimson. Retrieved 20 November 2017.
  14. ↑ Burstein, David D. (27 March 2012), The Xfund, Harvard, And The Student-Entrepreneur, Fast Company , retrieved 25 February 2021
  15. 1 2 Xfund Closes $100 Million Second Fund, Xfund, 4 December 2014, retrieved 25 February 2021
  16. 1 2 3 "The Experiment Fund welcomes Accel, Polaris, and new advisers". harvard.edu. Harvard John A. Paulson School of Engineering and Applied Sciences. June 26, 2012. Retrieved 29 November 2017.
  17. 1 2 3 Landry, Lauren (December 4, 2014). "Harvard-Based Xfund Closes $100M Second Fund". American Innovation. Retrieved 21 November 2017.
  18. 1 2 Boslet, Mark (May 28, 2014). "Experiment Fund looks ahead". PE Hub. Retrieved 29 November 2017.
  19. ↑ Primack, Dan (3 September 2020), Xfund raises $120 million for third fund, Axios, retrieved 25 February 2021
  20. 1 2 Primack, Dan (May 28, 2014). "Exclusive: NEA's Patrick Chung to join Xfund fulltime". Fortune. Retrieved 30 November 2017.
  21. ↑ Primack, Dan (December 4, 2014). "Harvard-affiliated VC fund raises $100 million". Fortune. Retrieved 21 November 2017.
  22. 1 2 Chapman, Lizette (December 4, 2014). "Xfund Closes $100 Million Second Fund, Targets Student Entrepreneurs". Wall Street Journal. Retrieved 29 November 2017.
  23. ↑ "Dispute at Xfund", The New York Times , New York City, 17 May 2016, retrieved 25 February 2021
  24. ↑ Geron, Tomio (May 16, 2016). "Lawsuit Escalates Xfund Conflict". Wall Street Journal. Retrieved 1 December 2017.
  25. ↑ "New Lawsuit against Patrick Chung, David York, and hijacking of Harvard". scribd.com. Superior Court of the State of California (via scribd). Retrieved 3 December 2017.
  26. ↑ Tezuka, Maera (3 September 2020), XFund pulls in $120M for 3rd fund, S&P Global, retrieved 21 February 2021
  27. ↑ Steiner, Christopher (5 October 2015), Big Investors on Campus: Why VCs are scouting student startups, Reuters , retrieved 25 February 2021
  28. ↑ Jean Lee, Denise Hui (12 October 2020), Stanford students launch Lighthouse app to kickstart spontaneous connection, Stanford Daily
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.