Felis Ventures Raises $900 Million in New Funds

Felicis Ventures Secures $900 Million in New Funding

Formerly an outsider in the venture capital landscape, Aydin Senkut, a previous executive at Google, has propelled his firm, Felicis Ventures, to prominence. The company is now announcing commitments totaling $900 million across two new investment funds.

Fund Details and Investor Confidence

These funds comprise a $600 million early-stage fund and a $300 million opportunities fund, designed to further support the firm’s most rapidly expanding portfolio companies. Notably, Felicis’s limited partners expressed a desire for the firm to raise an even larger sum.

The current favorable market conditions undoubtedly play a role, but the primary driver is Felicis’s consistently strong performance. The firm, which began with a $4 million investment from Senkut himself, has steadily increased its investment capacity with each subsequent fund.

Felicis’s seventh flagship fund closed with $510 million in March of the previous year. The firm reports generating 6x cash-on-cash returns for its investors across all funds, even accounting for losses.

A Track Record of Successful Investments

Pinpointing the exact reasons for Felicis’s investment success is complex. However, the firm has demonstrated a knack for identifying promising companies early on, including significant initial investments in Shopify, Canva, and Ayden.

Shopify, which became a public company in 2015, currently holds a market capitalization of $185 billion. Canva’s private valuation reached $15 billion earlier this year. Ayden, after its IPO in 2018, now boasts a market cap of $85 billion.

Global Reach and Strategic Investments

Felicis has consistently sought opportunities beyond domestic borders – a strategy increasingly adopted by other firms. Alongside its international investments, the firm has also made astute choices within the U.S. market.

Successful U.S. investments include Plaid (valued at approximately $14 billion), publicly traded Guardant Health, Credit Karma (acquired by Intuit for around $7 billion), and recently public Recursion Pharmaceuticals.

Investment Philosophy and Approach

According to Senkut, who leads the firm alongside general partners Wesley Chan, Sundeep Peechu, Victoria Treyger, Niki Pezeshki, and incoming general partner Viviana Faga, Felicis employs a balanced investment strategy.

The firm makes both conservative and more speculative investments, allocating larger sums to more established opportunities to fund riskier, innovative ventures, such as a company developing a sugar alternative.

Prioritizing Founder Relationships

The partners emphasize the importance of maintaining a high net promoter score, indicating strong relationships with founders. They prioritize treating founders well, fostering a reciprocal relationship that often results in positive referrals during competitive funding rounds.

Senkut explains, “Our goal is for founders to enthusiastically recommend us, feeling we’ve provided significant support, rather than the conventional VC approach of imposing conditions based solely on investment size.”

Early-Stage Focus and Learning from Investments

Peechu, who joined Felicis approximately 11 years ago, highlights the firm’s willingness to invest early, even when market conditions are uncertain. The fund’s strategy isn’t solely focused on maximizing returns.

Sometimes, a smaller investment – even as little as 2% or 3% of a company – can provide valuable insights that inform larger investments in the same sector, potentially reaching $30 million to $50 million.

Peechu cites an early investment in video game developer Tapulous as a precursor to a larger investment in game maker Rovio. He notes that waiting for a category leader to emerge can result in missed opportunities and economic losses.

Expanding Investment Capacity

With its increased capital base, Felicis is poised to expand its investment range. The firm will now consider investments ranging from $1 million to $50 million, depending on the opportunity.