I spoke in the dark with Hemant Taneja, CEO and Managing Director of General Catalyst.
Well, he didn’t know that, but he probably does now. Yesterday morning, news broke that General Catalyst (GC for short) had raised approximately $8 billion in new funding. I woke up at 6am according to my time and called Taneja around 7:20am. Then, about halfway through the conversation, I realized that I had completely forgotten to turn on the light.
Taneja, whose investments include Stripe, Samsara, Canva, Anduril, and Gusto, breaks down that nearly $8 billion figure. About $4.5 billion is going to the company’s VC fund, which includes seed and growth stocks. From there, $1.5 billion will go toward GC’s “foundation” strategy, and another $2 billion toward “separately managed accounts.” This is GC’s 12th set of funds. I asked Taneja bluntly. To what extent is General Catalyst a VC firm, and to what extent is it becoming something else?
“So we describe ourselves as a global investment and transformation company,” Taneja told Fortune. “At our core, we are very early-stage venture capital…It gives us permission to think about transforming the industry. You’ve probably read about our work in health, and we’re starting to do the same in many other industries. Masu.”
I think the answer means something like, “We do venture capital, but we’re not technically a venture capital firm.” This is not surprising, given that Taneja has previously (and publicly) expressed his views on the limitations of the traditional venture capital model. So a lot of what Taneja and I discussed while sitting in flannels in the dark wasn’t what you’d call standard VC stuff. We talked about the company’s healthcare strategy, which has garnered headlines. (Taneja acknowledged that GC’s acquisition of Akron, Ohio-based health system Summa Health, announced in January, has not yet been completed.) Taking such all-in strategies to other areas What does that mean?
“We are actively working on it,” Taneja said. “What does it mean to do that on defense? What does it mean to do it in manufacturing? Maybe you’ve seen that we’ve invested in rebuilding American manufacturing. We think about manufacturing from a global perspective in all the regions we focus on, and we think about other industries as well. and bring resilience to an industry that
The $1.5 billion for the “Create” strategy will focus on AI. Taneja believes that venture capital is “very serendipitous,” whereas creation is more “deliberate” and involves “catalyzing a project.” GC decided it needed to focus on “applied AI” opportunities now, “which is why we have now significantly expanded our funding.” (GC invests in France-based Mistral AI Maybe home, but my personal favorite GC investment right now is the AI-powered smart bird feeding company Bird Buddy ).
Taneja is interested in the opportunity to onshor AI productivity to reverse the offshoring trend, and as he tracks the AI-powered “workforce transformation,” We are focusing on areas such as: And as GC expands on its founding strategy, the company has now also expanded on its separately managed account (SMA) strategy.
Taneja told Fortune that some of GC’s largest LPs are interested in SMA because they want to have “selected exposure” to long-term transformational technologies, including AI. I asked Taneja: How does the LP feel? He said LPs see the potential for “very high, very good returns” and suggested he was reassured by GC’s patient approach. But certainly, liquidity is a hot topic, and Taneja looks to startups themselves.
“That’s definitely a top priority … and we’ve put these processes in place,” he said. “We developed this product called Customer Value Strategy that provides companies with a path to liquidity.” Broadly speaking, this strategy involves financing customer acquisition costs (CAC) like an asset. , to secure cash so that companies can grow without relying on dilutive equity financing. As companies go private for longer periods of time, the idea is to create liquidity for companies without the need for an IPO or acquisition. (The customer value strategy is not specific to this new set of funds and is allocated through a separate capital pool.)
“As our opportunities mature with the financial institutions necessary to create these companies and create liquidity, our industry needs to mature as well,” Taneja said. “That’s the bottom line for me.”
At the end of the day, it’s about keeping the lights on for startups and the companies that support them. Taneja hung up and I looked around and turned on my light.
(Maybe) Blue skies await… Bluesky has raised $15 million in Series A led by Blockchain Capital with participation from Alumni Ventures, True Ventures, SevenX, and more. Bluesky, formerly known as Twitter and known as Elon Musk’s Artist X challenger, has announced that it has more than 13 million users. For a little fun, let’s do a little time travel. Twitter raised $15 million in Series B in 2008. Although the company did not disclose user numbers at the time, reports through August 2009 put the number of Twitter users at approximately 23.5 million. . So, after years of scratching our heads, are microblogging services more or less worth the same?
We invite you to…Network with the world’s top business and policy leaders at the Fortune Global Forum in New York City, November 11-12. Confirmed attendees include the CEOs of PayPal, Dow, Nasdaq, Siemens USA, Indeed, Yum China, and AT&T, as well as seven-time Super Bowl champion Tom Brady and Pulitzer Prize-winning composer Wynton Marsalis. Mr. etc. Request an invitation here.
see you on monday
Allie Garfinkle
Twitter: @agarfinks
Email: alexandra.garfinkle@fortune.com
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Nina Ajemian oversaw the deals section of today’s newsletter. Subscribe here.
venture deal
– San Francisco-based full-stack payment processing company Finix has raised $75 million in Series C funding. Acrew Capital, Leap Global, and Lightspeed Venture Partners led the round, with participation from Citi Ventures, Tribeca Venture Partners, and existing investors Homebrew, Insight Partners, Inspired Capital, and Cap Table Coalition.
– Concentric AI, a San Mateo, California-based AI-based data security solutions provider, has raised $45 million in Series B funding. Top Tier Capital Partners and HarbourVest Partners led the round, with participation from CyberFuture and existing investors Ballistic Ventures, Engineering Capital, Clear Ventures, and Citi Ventures.
– Nooks, a San Francisco-based AI sales assistant platform, has raised $43 million in Series B funding. Kleiner Perkins led the round, with participation from existing investors Lachy Groom and Tola Capital.
– Medtech Alimetry, an Oakland-based gastric diagnostic technology developer, has raised $18 million in Series A funding. GD1 led the round, with participation from Olympus Innovation Ventures, IceHouse Ventures, AGA Ventures, and existing investors.
– Seattle-based social app Bluesky has raised $15 million in Series A funding. Blockchain Capital led the round, with participation from Alumni Ventures, True Ventures, SevenX and others.
– FiberSense, a Sydney-based smart sensing technology developer, has raised $14 million in funding. Prosus Ventures led the round, with participation from Investible, existing investor Colinton Capital and others.
– Boston-based sleep technology product developer Ozlo Sleep has raised $12 million in funding from LifeArc Ventures, Drive by DraftKings, Wise Ventures and others.
– OLOID, a Sunnyvale, California-based access and identity management workplace technology provider, has raised $6 million in Series A1 funding. Yaletown Partners, Exposition Ventures, George Kaiser Family Foundation, and Carya Ventures led the round, with participation from existing investors.
– Cascade AI, a Seattle-based enterprise AI HR and benefits solution, has raised $3.75 million in seed funding. Gradient led the round, with participation from Myriad Venture Partners and Success Venture Partners.
– New York City-based AI social connection platform Boardy has raised $3 million in pre-seed funding from HF0, 8VC, Precursor, and more.
– [cafeteria]a New York City-based brand insight creation platform for teens, has raised $3 million in seed funding. Collaborative Fund and Imaginary Ventures led the round, with participation from Bertelsmann and Guy Oseary.
private equity
– Genstar Capital has increased its investment in Likewize, a Dallas-based technology protection and support provider, and is now a majority investor. Financial terms were not disclosed.
– Kudu Investment Management has acquired a minority stake in Revelation Partners, a healthcare-focused secondary manager based in Sausalito, California. Financial terms were not disclosed.
– One Equity Partners has acquired York Telecom, an IT services company based in Wall, New Jersey. Financial terms were not disclosed.
– Snow Peak Capital has acquired TurbineAero, a Phoenix-based auxiliary power unit maintenance, repair and overhaul service provider for the aerospace industry. Financial terms were not disclosed.
Exit
– Latour Capital has acquired Groupe VISCO, a high-precision machining company based in Charette-sur-Loing, France for the defence, aerospace, energy and fine watchmaking sectors, through Tikehau Capital and Crédit Agricole. We have agreed to acquire the company from Regions Investment. Financial terms were not disclosed.
– Levine Leichtman Capital Partners has agreed to acquire a majority stake in Schülerhilfe, a tutoring service provider based in Gelsenkirchen, Germany, from Oakley Capital. Financial terms were not disclosed.
other
– Socure has agreed to acquire San Francisco-based real-time risk decision-making company Effectiv for $136 million.
– Keurig Dr. Pepper has acquired a 60% stake in GHOST, a Chicago-based lifestyle and sports nutrition company, and has agreed to acquire the remaining 40% stake in 2028. Financial terms were not disclosed.
IPOS
– Septerna, a San Francisco-based GPCR-focused biotechnology company, plans to raise $275.4 million by offering 15.3 million shares at a price of $18 on the Nasdaq market. The Company recorded revenue of $1 million for the year ended June 30, 2024. The company is backed by Third Rock Ventures, RA Capital, Samsara BioCapital, Invus Public Equities, Deep Track Capital, Goldman, and Biotechnology Value Fund.
