Former investment banker Khaled Jalanbo was working with emerging artists when he met an entrepreneur who pointed out the similarities between working with artists and startup founders.
“When you get picked up by a good organization or a good leader or you are represented by a good gallery, suddenly there is more demand for people to support you or support you,” Jalanbo said.
It turned out that the entrepreneur was collecting money, and Jalanbo was intrigued. So he created an SPV (special purpose vehicle) to invest in the company. After raising several SPVs, Jalanbo realized that it would be more efficient to have his own fund.
“When it came to the venture capital industry, I didn’t have that many connections,” recalls Jalanbo. “So I decided I would do something a little different.”
For his first fund, he agreed to waive interest-bearing. This means that Jalanbo told potential investors that he would take zero fees and only management fees in order to be able to run the fund and “prove that this is something we can do.”
The strategy worked and Jalanbo ended up raising $5 million for its first fund. Walia Venturesin 2018. At the same time, he created a joint investment fund to be able to make subsequent investments.
“We wrote checks to companies for $100,000 and $200,000, sent a note to LP, and often they said, ‘If you can get more allocations, we’ll double the rate,’” recalls Jalanbo, the firm’s managing partner. “So we activated this mutual investment fund, and it was actually a great way to build a firm.”
That first fund was so successful — ranking in the top 5% of its crop, according to Cambridge Associates — that Jalanbo was able to attract one of the world’s largest investment firms to co-found his second fund, Tiger Global.
He met Tiger through one of Walia’s portfolio companies, Selfbook, after both Walia and Tiger had backed a hotel payment software company. This startup has shut down. $25 million funding round in October last year.
And today, Valia announces that it has closed $50 million in capital for a second fund, Valia Ventures II. With over $100 million in assets under management (AUM), including a co-investment program, Valia has become a formidable player in pre-seed and pre-seed investment.
In addition to Tiger, LP includes a strategic group including “experienced startup founders, top tech executives, international family offices, and high-profile institutional investors,” Valiya says.
Valia Ventures II will initially invest up to $1 million in pre- and seed rounds, with 50% of its capital reserved for subsequent rounds. He will also continue to pursue an active co-investment program to support existing portfolio companies as they have more capital needs, Jalanbo said. This program will invest between $2 million and $10 million in growth stages of existing portfolio companies and a “sample” of new opportunities.
He describes Valia as a generalist firm.
“We think the best companies of tomorrow will defy classification,” Jalanbo told TechCrunch. “We are looking for ambitious founders who are tackling global dilemmas such as climate change. We are actively investing in founders who work in areas such as healthcare and fintech, especially when it comes to expanding financial inclusion.”
In this way, he says, the firm can “look horizontally across sectors.”
“We don’t have a predetermined idea of what every company should look like and we are very eager to meet founders who break stereotypes,” said Jalanbo, who was born in London to Syrian immigrants.
As an example, he points to Walia’s investment in humane, a software and hardware company founded by Apple alumni Bethany Bongiorno and Imran Chaudhry. Valia was the first firm to write a check to the company, Jalanbo said. The startup completed a $100 million funding round last September.
Valia doesn’t have a diversity quota, but Jalanbo said it tends to gravitate toward founders with “interesting and as varied backgrounds” as the team. Notably, its four top-performing investments to date are female-based and led, black-founded and led, or immigrant-founded and led. Most of his investments have been in companies founded by women or BIPOC/AAPI. Besides Humane and Selfbook, Walia has also invested in Legacy, System and Relativity Space, among others.
Overall, the four Valia Ventures II investments have raised more than $150 million in additional funding to date from companies such as Bond Capital, Forerunner Ventures, Sam Altman, SoftBank Group and Tiger Global. The firm invests from San Francisco, London and New York.
Interesting, Earlier this year, Tiger Global stated that allocating $1 billion to fund early-stage technology projects. He has also supported firms such as Better Tomorrow Ventures, which raised a $225 million fundMoxie Ventures, who received $85 million for Fund IIand Chapter One Ventures, which recently launched an accelerator program from a $40 million fundraiser.
Credit: techcrunch.com /