Social Capital and Melia Robinson/Business Insider
Arjun Sethi (left), Jonathan Hsu, and Ted Maidenberg left Social Capital to start their own fund, Tribe Capital.
- Tribe Capital, the new venture firm founded by partners who quit Social Capital en masse, is co-leading a $22.7 million investment into a hot cryptocurrency startup.
- The firm is leading the investment alongside Social Capital, which was founded by former Facebook executive Chamath Palihapitiya. It suggests no hard feelings between the two.
- We know a little bit more about Tribe Capital's activities now. The firm will focus on internet and software companies and use data to make better investment bets.
Social Capital, one of Silicon Valley's most buzzworthy venture firms to emerge in recent years, has seen an exodus of top partners over the summer. Now, many of the departed are joining forces to launch a new fund, Tribe Capital, which just made its first investment.
Sfox, a startup whose platform brokers cryptocurrency purchases for high-volume traders and institutional investors, has raised $22.7 million in a Series A funding round, led by Tribe Capital and Social Capital. Tribe Capital's cofounder Arjun Sethi will join the board.
Y Combinator, Khosla Ventures, Brock Pierce's Blockchain Capital, and SV Angel were among participating investors.
That former Facebook executive Chamath Palihapitiya's firm, Social Capital, would lead the investment alongside those VCs who fled the firm says a lot. Sethi left Social Capital on "good terms," sources with direct knowledge of the situation told Business Insider last month.
It's been a tumultuous year at Social Capital, where Palihapitiya has made a series of abrupt and jarring changes in strategy. Five partners, including one of the firm's cofounders, Ted Maidenberg, quit the firm in the span of a few weeks, causing concern among some founders who have taken money from Social Capital.
Some of those Social Capital defectors are back in the game with an investment in Sfox, a company that's dedicated to solving the problems that prevent high net worth individuals and institutional investors from buying cryptocurrencies like bitcoin. Sfox has already processed $9 billion in transactions since its 2014 founding.
Maidenberg, Sethi, and Jonathan Hsu, who led quantitative investing and data science activities at Social Capital, are the cofounders of Tribe Capital.
According to Sfox's announcement, "Tribe Capital is a global venture capital investment firm focused on internet and software investments leveraging data and technology to partner with great founders solving hard problems."
Tribe's data-driven approach is unsurprising given Hsu's expertise. His data science team at Social Capital was tasked with using data to find, evaluate, and manage companies in the firm's portfolio.
Tribe Capital aims to crack data-driven investing better than before.