Thiel-Backed Valar Ventures Closes $150M For Fund V

On Wednesday, NYC-based Valar Ventures filed paperwork with the SEC indicating it’s fully raised $150 million for a new venture capital fund. Valar Fund V is the firm’s largest flagship venture capital fund raised to date.

Valar’s fourth fund, closed in September 2018, topped out at just over $133 million. Its prior funds were each $100 million.

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An initial Form D disclosure was made for Fund V on January 14, 2019. However, today’s filing indicates the firm didn’t formally close its first capital until April 1, 2019.

Valar Fund V closed capital from 57 investors. The firm paid $666,600 to New York-based Mercury Capital Advisors and London-based Astir Capital Advisors, which acted as placement agents on the transaction, according to the filing.

The filing lists two managing members for the fund: James Fitzgerald and Andrew McCormack, both founding members of the firm.

There is a third founding partner, billionaire investor, PayPal and Palantir co-founder, and political provocateur Peter Thiel, who is not listed on the filing. Thiel himself is not listed on the team section of the firm’s website, though his family office, Thiel Capital, is.

Valar was spun out from Thiel Capital in 2014. Prior to launching Valar, Fitzgerald served as COO and general counsel to Thiel Capital, “where he helped manage Peter’s network of investments and businesses,” according to the firm’s website. McCormack also has a long working relationship with Thiel. He joined PayPal in 2001, helped launch Thiel’s global macro hedge fund Clarium Capital in 2002, and later joined Thiel Capital after a short stint as an independently-operating San Francisco restauranteur.

In January, Valar Ventures filed paperwork signaling intent to raise its first “opportunity fund” targeting $200 million. And amended filing from June changed the name of the fund to Valar Velocity Fund 1, now targeting $150 million. The June filing was made before Valar Ventures officially closed capital for the later-stage follow-on fund and and the current fundraising status of that investment vehicle is not known. Both placement agents from flagship Fund V were listed on the filing for Velocity 1.

The majority of Valar’s deals are struck with seed and early-stage ventures. The firm’s most recently disclosed investment was with cryptocurrency lending operation BlockFi Lending which closed $18.3 million in its Series A round, which Valar led. Other recent seed and early-stage investments include VR prototyping startup IrisVR, rent-to-own venture Kafene, and Taxfix, a mobile-first tax preparation service provider based in Berlin, Germany.

Valar Ventures has made a few later-stage investments too. Most recently, it participated in the $170 million Series D extension of existing portfolio company N26, a leading European “challenger bank” which recently began rolling out in the U.S.. Valar Ventures led N26’s Series A round in 2015 and had followed on since then. It’s for maintaining long-term investing relationships like that between Valar and N26 that firms raise “opportunity” or “growth” funds: to maintain pro rata share in their best-performing portfolio companies. It’s unclear whether Valar invested in N26’s most recent round out of its opportunity fund.

Valar backer Peter Thiel was also co-founder of multi-stage venture firm Founders Fund, where he is listed as a partner. Thiel is also the principal benefactor of the Thiel Fellowship program, which grants money to young entrepreneurs.

Illustration: Li-Anne Dias