Fabrice Grinda says it was never his intention to run a venture. He just (really) enjoyed investing in angels. In fact, in late 2013, when he was about to sell the global advertising marketplace OLX — his third company — he says he had already written checks to more than 150 startups with longtime friend and OLX co-founder Alec Oxenford. “We’ve been working together forever. It was really a family office that invested heavily,” Grinda recalls.
Given that wave of checks, potential LPs, including strategic investors, family offices, and founders, began to show interest in investing with them. Oxenford eventually decided to create another marketplace instead, launching Letgo in 2015. (It was later acquired by rival OfferUp.) But Grinda leaned on to invest with another friend and serial entrepreneur, Jose Marineand by 2016, a Norwegian telecom company offered Telenor to fund a fund from the duo alone, giving them $50 million to do so.
Fast forward, and their outfit, FJ Labs, has evolved from a two-man outfit to a sprawling company with 34 employees, including eight investors and four “full partners.” It started growing in earnest in 2018, when LPs pledged to invest $175 million in the outfit. Now, Grinda is announcing that FJ Labs has raised $260 million in capital commitments in a pre-seed fund and an opportunity fund “Series B and beyond,” with support from family offices, institutional investors and a broad range of founders. including LinkedIn, PayPal, Supercell, Transferwise, MongoDB and Wayfair.
Indeed, over time, FJ Labs has come to feel less like a “lab” and more like a traditional corporation, though Grinda dismisses the comparison.
“We are a venture fund,” he says, but one that “invests angelally on a venture scale,” he insists. “We don’t lead. We don’t praise. We do not take any board seats. We decide whether to invest or not after two one-hour meetings over the course of a week because we have extraordinary pattern recognition that allows us to make decisions extremely quickly.
It sounds risky, but FJ Labs has results for its approach. For example, among its many investments, it has made early bets on outfits that have grown tremendously over time, including Alibaba, Coupang, Flexport, and Delivery Hero.
Focusing on marketplaces and network effects on companies – which Grinda knows well – certainly helps. So is the portfolio that FJ Labs has built over time, which includes 900 active investments as part of what Grinda describes as “the largest marketplace portfolio in the world.” (Pitchbook data supports that FJ Labs de most active venture outfit worldwide in the third quarter of last year.)
It all builds on itself as its own sort of flywheel, Grinda suggests, pointing to the company’s deal flow to underline the point. Through FJ Labs’ 900 companies, it has connections with about 2,000 founders, and they “come back for their next companies and send us their friends and employees,” says Grinda.
Likewise, because FJ Labs is a “source of differentiated deal flow for the VCs, they invite us into their deals,” he says.
FJ Labs will be even bigger if everything goes according to plan. Grinda says the “idea is to create an institution that will be a legacy and will last for decades.”
It’s hard to imagine Grinda being who famous itinerant, could stay with venture capital for so long. But he says he believes it. Right now, there are three issues that FJ Labs would like to help address while also making money, and none of them are minor. The first is inequality of opportunity, the second is climate change, and the third is the “mental and physical well-being crisis.”
A related bet is on User Interviews, a seven-year-old Brooklyn-based startup that helps user experience researchers search for survey participants with different demographics and behavioral criteria. (TechCrunch covered its latest funding here.)
Other startups don’t easily fit into any of those three buckets, including Gravitics, a year-old Seattle-based startup developing aerospace living and working modules that announced a $20 million round last year. (We’ve covered that round, too.)
Apparently that also works if there is a web3 corner. Yesterday, a London-based blockchain infrastructure company that is one year old said $8.5 million in seed funding to build private sharding capabilities for blockchain networks, with participation from FJ Labs.
Many of the company’s bets come down to what FJ Labs’ perspective on what the future of humanity looks like offers Grinda. “We have a perspective on the future of food, cars, real estate, work. . . we try to solve the world’s problems; we are also thesis-driven.”
You can learn more about what FJ Labs is funding and why in a story we published about the outfit last month, before FJ Labs closed its latest funds.