Founders Fund, Peter Thiel's venture firm, is raising a new $3 billion fund to maintain its power in startups that stay private
- According to a Wall Street Journal report from Rob Copeland and Katie Roof on Monday, Peter Thiel's venture firm Founders Fund is raising nearly $3 billion in new funding.
- A whopping $1.5 billion will be dedicated to investing in late-stage growth companies, like Airbnb. Founders Fund is the latest VC to open a dedicated late-stage fund.
- The firm typically focuses on taking large stakes in seed and Series A stage companies, but has struggled to maintain ownership as companies stay private longer with backing from massive growth funds like SoftBank's Vision Fund.
- According to the report, Thiel and other firm partners will provide 20% of the new funds' money.
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Founders Fund is getting into late-stage investing with nearly $3 billion in new funding.
According to a Wall Street Journal report from Rob Copeland and Katie Roof on Monday, Peter Thiel's venture firm is raising $2.7 billion across two funds. A majority of the money, about $1.5 billion, will go towards an entirely new growth-stage fund in addition to its traditional early-stage investment strategy.
The move marks a shift from Founders Funds traditional investment focus on younger startups, and it comes as startups remain privately-held for years - a trend that may be exacerbated by string of disappointing recent public offerings such as Uber, Lyft and Peloton.
Massive injections of venture funding from the likes of SoftBank's Vision Fund have made it possible for startups to delay IPOs and remain private for longer periods of time. The trend has forced a growing number of VC firms to jump into the late-stage investing game, with Bessemer Venture Partners and Andreessen Horowitz both opening splashy, billion-dollar funds dedicated to growth investments in the past six months.
Founders Fund has made a name for itself by staking out relatively large investments in seed and Series A stage companies. But the fund has struggled to maintain ownership as some of its most profitable early bets like Airbnb and Thiel's data analytics startup Palantir bring in larger investors in later rounds and diluting Founders Fund's stake, according to the Wall Street Journal report. With a dedicated fund for late stage companies, Founders Fund will be able maintain its ownership, and power, in companies as they continues to grow, netting a more favorable outcome for the firm.
According to the report, Thiel and other partners at the firm will provide about 20% of the capital for the two funds.
Founders Fund did not return Business Insider's request for comment.
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