Version One Ventures closes $120M in two new funds

The firm has expanded its thesis and geographical focus over the past year to back mission-driven founders around the world.

This morning, Version One Ventures’ founding partner Boris Wertz announced that his firm closed two new funds worth a combined $120 million: Fund IV ($84 million) and Opportunities Fund II ($36 million).

Version One celebrated its nine-year anniversary this month and has evolved in notable ways over the years. When its first fund was raised in 2012, it was a generalist firm focused on consumer Internet, e-commerce, SaaS and mobile companies. By 2016, the company had begun to specialize into a thesis-driven firm, focusing on businesses with potentially large network effects built around people and/or data.

Last July, the firm updated its thesis, saying that network effects were still important, but acknowledging that “they are less of a differentiator than they were a decade ago,” wrote partner Angela Tran. And as the firm’s interests changed, “the one constant has been the founder,” wrote Tran. “No matter the vertical, geography, business model, macro or micro trends, entrepreneurs form the nucleus of a generational company. And that’s why the founding team is the most important factor in our investment decision-making.”

This led the firm to update its thesis to: “Backing mission-driven founders at the earliest stages.”

But the firm has been willing to overlook the “earliest stages” when the founder fit is solid enough. Case in point: Brian Armstrong and Fred Ehrsam of crypto exchange Coinbase. Back in 2017, Wertz came across the company. Although it didn’t fit the firm’s thesis at the time, Wertz invested as part of the startup’s $100 million Series D funding. “It was a much later stage for us than our typical pre-seed/seed investment,” he wrote on his firm’s blog. At the time, the funding gave the digital currency exchange a post-money valuation of $1.6 billion USD.

This past April, Coinbase went public through a direct listing, opening with a market cap of over $100 billion, and closing the day at around $85 billion USD. It’s one of the largest public listings ever in the U.S. Version One made back its money 25 times over, making the investment “a multiple fund maker,” according to Wertz.

Going global

Not only has the firm expanded its investing thesis, but also its geographical focus. “The rapid transition to remote work… triggered dramatic changes across our portfolio and startups everywhere,” Wertz said recently, “most notably by collapsing geographic boundaries.”

“While we’re not focused on where your startup is headquartered, we are uniquely interested in founders with global ambitions to build a category-leading company,” Wertz explained. “Entrepreneurs looking to build the ‘xyz’ for country ‘abc’ aren’t going to be a fit for us.”

Doubling down on opportunities

Moving forward, Wertz says the firm will focus on its core fund (Fund IV), but is excited to leverage the Opportunities Fund to “double down on our winners” and “partner with our founders in their later financing rounds.”

Version One’s first Opportunities Fund has already invested in Ada, Dapper Labs, Headout, Jobber and Shippo.

Investing in emerging industries

In terms of current investments, the firm’s crypto portfolio includes Coinbase, Dapper Labs (NBA TopShot. Cryptokitties, Flow), Nexus Mutual, and Uniswap. Its portfolio of climate and energy startups features Patch, NCX (formerly Silviaterra), and EnPowered, among others. Wertz said these areas remain priorities, and Version One will continue to invest in SaaS, marketplaces and healthcare.

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