Thrive Capital, the venture capital firm owned by Joshua Kushner, has raised $2 billion for a pair of new funds. About $500 million will go toward early stage investments. An additional $1.5 billion is earmarked for investments in more mature companies. The firm has built on the success of its portfolio companies over the years. Today it has $9 billion total assets under management.
The company is building on its past success. It focuses on allocating funds to invest in a mix of startups and growth-stage companies approaching the maturity stage. It has been an investor in companies such as Instagram, Warby Parker, Artsy, Reddit and many other notable names.
The company made filings in Delaware in January 2021 for a pair of finds. They are Thrive Capital Partners VII LP and Thrive Capital Partners VII Growth LP. The $2 billion raised for its latest funds is double what it raised for its sixth fund in 2018. It is a remarkable demonstration of Thrive Capital’s rapid growth.
Thrive Capital History
Based in New York-based, Thrive Capital was founded in 2009 by Josh Kushner. It started with only a $10 million fund in 2009. Five years later, after a series of strategic investments in media and technology companies, Thrive Capital closed its fourth fund at $400 million. Thrive Capital’s early hits included Instagram, Spotify and Switch.
The firm maintained a secretive presence in its early years. Its website contained just one sentence of text, “Thrive Capital is a venture capital investment firm focused on media and technology investments.” This early approach contrasted with its peers, who have actively tried to build their brands through Twitter, regular blog posts, and other media strategies.
Since Thrive Capital’s early years, founder Joshua Kushner has attracted significant media attention as well as controversy. As a result of his marriage to supermodel Karlie Kloss, he makes frequent appearances at star-studded events. The celebrity spotlight has in turn attracted increased attention to his business activities. The spotlight cast on Joshua Kushner was further amplified in 2016 due to his ties to the Trump family. His brother, Jared Kushner, is the son-in-law of former President Donald Trump. Many in the startup community have frowned upon his family connections to the Trump administration.
Some Successful Exits
A number of buzzworthy companies in Thrive Capital’s portfolio have pulled off successful exits recently. Fintech startup Affirm and insurance tech startup Lemonade have recently had IPOs. Opendoor and Compass, two real estate technology companies Thrive has investments in, have also went public recently. Finally, in the fourth quarter of 2020, Unity Technologies, an AR/VR gaming platform in Thrive Capital’s portfolio since 2016, went public with a $13.6 billion valuation. When Thrive Capital invested in Unity’s 2016 Series C round, the gaming company was valued at only $1.5 billion.
It has also been a leading investor in a number of startup fundraising rounds. Thrive Capital led the $185 million Series D round of Airtable in September 2020, a collaborative cloud software platform. The Series D round put Airtable’s valuation at $2.5 billion.
Thrive Capital Successes
Thrive Capital was a key investor in Robinhood Financial’s Series C round in 2017. Robinhood, the stock trading app that has revolutionized the online brokerage industry, attained unicorn status as a result of its $110 million Series C round. Thrive Capital’s 2017 investment in Robinhood, at the time valued at $1.3 billion, clearly paid off for the firm — today Robinhood is worth over $20 billion.
Oscar Health, a company founded by Joshua Kushner in 2012, went public in early March 2021. Despite the hype leading up to its IPO, shares fell almost 11% on its first day of trading. Thrive Capital is a longtime investor in Oscar Health. The tech-focused health insurance company competes against health giants such as UnitedHealth and Aetna. In its S-1 registration statement with the Securities and Exchange Commission (SEC), Oscar Health stated that it has 529,000 members across 18 states. However, the company is highly sensitive to changing government regulations, and its losses widened to $400 million in 2020.
High Growth Tech Companies
Thrive Capital’s recent raising of $2 billion worth of funds comes amid a pandemic boom for high-growth tech companies. In 2020, U.S. venture capital firms raised a record $73.6 billion. As the valuation of tech startups has continued to soar, a number of prominent VC firms have raised even larger funds.
Silicon Valley-based venture capital and private equity firm TCV, or Technology Crossover Ventures, raised $4 billion for its eleventh fund in January 2021. It was the largest fund in its 25-year history. Similarly, Palo Alto-based Sapphire Ventures and San Francisco based Top Tier Capital Partners set fundraising records in February 2021.
Thrive Capital attributes its success to a diversified portfolio strategy. As the VC firm stated in a recent blog post, “Our strategy since founding has been consistent: remain flexible and agnostic to stage, sector and geography. We co-found businesses, partner with entrepreneurs early in their development, and lead and participate in late stage investments in category-defining companies.” If its past success is any indicator, Thrive Capital likely has a bright future ahead.