Spark Capital

Spark Capital is a venture capital firm in the United States, responsible for early-stage funding startups of consumer, commerce, FinTech, software, frontier, and media sectors. It has branches in San Francisco, Boston, and New York City.[1]

Spark Capital Partners, LLC
TypePrivate
IndustryVenture capital
Founded2005 (2005)
HeadquartersSan Francisco, California, United States, New York, NY, United States and Boston, Massachusetts
Key people
Alex Finkelstein, Nabeel Hyatt, Jeremy Philips, Santo Politi, Yasmin Razavi, Will Reed, Bijan Sabet, Kevin Thau
ProductsInvestments
Websitesparkcapital.com

History

Spark Capital was launched in 2005 by Paul Conway, Santo Politi, and Todd Dagres.[1][2][3] They have raised six early-stage funds and three growth funds.

  • The first fund, for US$265 million, was raised in 2005.[1][2]
  • The second fund, for $360 million, was raised in 2008.[1][2]
  • The third fund, for $360 million, was raised in 2010.[1][2]
  • The fourth fund, for $450 million, was raised in 2013 and its closure was announced in late February.[1] Partner Bijan Sabet told TechCrunch that this brought Spark Capital's money under management to $3 billion.[4]
  • The fifth fund, for $400 million, was raised in 2016.[5]
  • The sixth fund, for $450 million, was raised in 2020.[6]

Spark Capital also raised three growth funds.

  • The first Growth fund, for $375 million, was raised in 2014.[7]
  • The second Growth fund, for $600 million, was raised in 2016.[5]
  • The third Growth fund, for $900 million, was raised in 2020.[6]

Team

Spark Capital was founded in 2005 by Bijan Sabet, Paul Conway, Santo Politi, and Todd Dagres. Other people who have joined the company since its inception include Kevin Thau, Jeremy Philips, Alex Finkelstein, Yasmin Razavi, and Nabeel Hyatt.[3] The company consists of approximately 11–50 employees.[8]

Investment approach

According to a Forbes article, Spark Capital's success can be attributed to maintaining focus specifically on technology startups in the media, entertainment, and mobile sectors. Further, information-sharing within the company was organized so that all partners can work with a portfolio company, not just the partner assigned to that company.[2]

Spark Capital has been known for co-investing with Union Square Ventures. In fact, many of Spark Capital's top picks, including Twitter, Tumblr, and Foursquare, were made via partner Bijan Sabet and were joint investments with Union Square Ventures, made by partner Fred Wilson.[9][10][11][12] Other firms with which Spark frequently co-invests include SV Angel, Lerer Hippeau Ventures, and First Round Capital.[9]

Sabet says that Spark Capital's portfolio companies do not use non-compete agreements, which he says have been a key factor in limiting startup growth in New York and Boston.[13]

Companies

Twitter

Bijan Sabet, the partner at Spark Capital, invested in Twitter's second (Series B) round in June 2008, along with Jeff Bezos and additional investments from past investors such as Fred Wilson of Union Square Ventures, and Sabet also accepted a board seat at Twitter.[14] According to Hatching Twitter, Sabet and Wilson played a crucial role in facilitating smooth leadership changes at Twitter in October 2008 and later October 2010—ousting Jack Dorsey to install Evan Williams in 2008 and ousting Williams to install Dick Costolo in 2010.[15]

In November 2013, shortly after Twitter's IPO, Sabet wrote a blog post expressing his gratitude to Twitter, both as an investor and as a user of the service.[16] A Forbes article about Spark Capital quoted Sabet as attributing Spark Capital's success to the partners themselves' use of the products of the companies they invested in (such as Twitter) enabling them to better understand the companies from the perspective of consumers.[2]

Tumblr

Spark Capital was one of the early investors in Tumblr, where they co-invested with Union Square Ventures, paying the same amount for the same share, with Bijan Sabet as the assigned partner from Spark Capital.[17][18] Following the sale of Tumblr to Yahoo! for $1.1 billion, Spark Capital and Union Square Ventures each took home $192 million from the deal.[17][19][20]

Oculus

Spark capital invested in Oculus VR in both Series A and Series B funding rounds, which was subsequently sold to Facebook for an estimated $2 billion.[21] The company's General Partner Santo Politi joined the board of directors.

Cruise

Spark Capital invested in Cruise in the Series A funding round, and the company's General Partner Nabeel Hyatt joined the board of directors.[22]

Coinbase

Spark Capital invested in Series D funding rounds of a cryptocurrency exchange platform Coinbase.[23]

Discord

Spark Capital invested in multiple funding rounds of a gamer chat tool Discord, with General Partner Nabeel Hyatt joining the board as an observer.[24][25]

eToro

Spark Capital invested in multiple funding rounds of a social trading and multi-asset brokerage company eToro,[26] and led its $8.3 million funding round in January 2011[27][28] and $15 million round in March 2012.[29] The company's General Partner Santo Politi joined the board of directors.

Pendo

In December 2016, Spark Capital led a series B funding round for Pendo, a software company.[30] This was in collaboration with Salesforce Ventures, Core Capital Partners, Battery Ventures, IDEA Fund Partners, and Contour Venture Partners. The company's General Partner Megan Quinn joined the board of directors.[31]

Perch

Spark Capital has invested in multiple rounds of technology-driven commerce company Perch.[32]

Niantic

Spark Capital led a Series B funding round for Niantic, a software development company that developed augmented reality mobile games Pokémon Go and Ingress in November 2017. As part of the $200 million funding deal, Spark's partner Megan Quinn joined Niantic's board.[33]

Snap

Spark Capital invested in multiple funding rounds of a camera and social media startup Snap (owner of Snapchat).[34]

Others

References
  1. Rao, Leena (February 25, 2013). "Boston-Based VC Firm And Early Twitter Investor Spark Capital Raises $450M For Fourth Fund". Archived from the original on January 22, 2014. Retrieved January 24, 2014.
  2. Geron, Tomio (September 10, 2012). "How Spark Capital Invested In Hot Startups Like Twitter, Tumblr, Discord". Forbes. Retrieved January 23, 2014.
  3. "Team". Spark Capital. Archived from the original on February 20, 2014. Retrieved January 24, 2014.
  4. "About". Spark Capital. Archived from the original on April 12, 2019. Retrieved April 14, 2019.
  5. Loizos, Connie (November 14, 2016). "Spark Capital suddenly has $1 billion to invest". Archived from the original on April 27, 2017. Retrieved April 26, 2017.
  6. Roof, Katie (January 30, 2020). "Spark Raises $1.35 Billion to Find the Next Plaid or Slack". The Wall Street Journal. Archived from the original on July 7, 2020. Retrieved June 21, 2020.
  7. Basich, Zoran (November 6, 2014). "Spark Capital's New Growth Fund Aims to Catch the Ones That Got Away". Wall Street Journal. Archived from the original on April 27, 2017. Retrieved April 26, 2017.
  8. https://www.linkedin.com/company/spark-capital-llc Archived August 6, 2012, at the Wayback Machine
  9. "Spark Capital and Union Square Ventures – So Happy Together: While USV and Spark are obviously BFFs, who else most frequently co-invests alongside these firms?". CB Insights. May 23, 2013. Archived from the original on January 16, 2014. Retrieved January 24, 2014.
  10. Rao, Leena (September 13, 2013). "Ask A VC: Early Twitter Investor And Spark Capital Partner Bijan Sabet On Founder Personality, Investment Syndicates And More". TechCrunch. Archived from the original on January 24, 2014. Retrieved January 24, 2014.
  11. Glasner, Joanna (May 22, 2013). "Union Square & Spark Capital: Venture's New Power Couple?". peHUB. Archived from the original on February 1, 2014. Retrieved January 24, 2014.
  12. Wilson, Fred (March 31, 2009). "Co-investors". A VC. Archived from the original on February 1, 2014. Retrieved January 24, 2014.
  13. Keohane, Dennis (July 11, 2014). "Bijan Sabet on Spark Capital's noncompetes approach: Our companies don't have them". BetaBoston. Archived from the original on July 13, 2014. Retrieved July 11, 2014.
  14. Stone, Biz (June 24, 2008). "Welcoming Bijan and Jeff". Twitter blog. Archived from the original on February 26, 2014. Retrieved January 24, 2014.
  15. Bilton, Nick (2013). Hatching Twitter. Portfolio Hardcover. ISBN 9781591846017.
  16. Sabet, Bijan (November 7, 2013). "Thank You, Twitter". Archived from the original on February 1, 2014. Retrieved January 24, 2014.
  17. Shontell, Alyson (May 22, 2013). "Early Tumblr Investors USV And Spark Capital Got ~ $192 Million Each From Yahoo Sale". Business Insider. Archived from the original on February 3, 2014. Retrieved January 24, 2014.
  18. Wauters, Robin (April 20, 2010). "Union Square, Spark Capital Double Tumblr's Funding To $10 Million". TechCrunch. Archived from the original on January 22, 2014. Retrieved January 24, 2014.
  19. Cohan, Peter (May 20, 2013). "Interview With Tumblr Investor, Spark Capital". Forbes. Retrieved January 24, 2014.
  20. Farrell, Michael (May 21, 2013). "Sale of Tumblr set to deliver big payday for Spark". Boston Globe. Archived from the original on February 1, 2014. Retrieved January 24, 2014.
  21. Garland, Russ (March 26, 2014). "Facebook Buys Oculus: Latest Win for Hot Venture Firm Spark Capital". WSJ.com. Archived from the original on May 19, 2017. Retrieved April 14, 2019.
  22. "cruise spark capital - Google Search". www.Google.com. Archived from the original on August 13, 2023. Retrieved April 14, 2019.
  23. "Coinbase's wild debut". Fortune. Archived from the original on August 18, 2021. Retrieved August 18, 2021.
  24. Needleman, Rolfe Winkler and Sarah E. (April 19, 2018). "Discord Valued At $1.65 Billion In New Funding Round". Wall Street Journal. ISSN 0099-9660. Archived from the original on August 18, 2021. Retrieved August 18, 2021.
  25. "Discord exploring sale that could be worth more than $10 billion". VentureBeat. March 22, 2021. Archived from the original on August 18, 2021. Retrieved August 18, 2021.
  26. "eToro Confirms $27 Million Funding Round with Ping An Ventures and SBT Venture Capital". Finance Magnates | Financial and business news. December 10, 2014. Archived from the original on August 4, 2021. Retrieved August 18, 2021.
  27. "eToro Inks $8.3M From Spark Capital & Social Leverage". Venture Capital Journal. January 26, 2011. Archived from the original on August 18, 2021. Retrieved August 18, 2021.
  28. "Investment Network eToro Scores $8.3 Million From Spark Capital, Others". TechCrunch. January 26, 2011. Retrieved August 18, 2021.
  29. "eToro Completes Funding Round of $15 Million Led by Spark Capital | BRM". Archived from the original on May 27, 2022. Retrieved August 18, 2021.
  30. "Pendo Raises $20m in Series B Financing". December 12, 2016. Archived from the original on April 27, 2021. Retrieved April 27, 2021.
  31. "Pendo Raises $20 Million in a Series B Funding". www.martechadvisor.com. Archived from the original on April 14, 2019. Retrieved April 14, 2019.
  32. "Perch Raises $123.5 Million Led By Spark Capital". PULSE 2.0. October 21, 2020. Archived from the original on January 17, 2021.
  33. Etherington, Darrell (November 24, 2017). "Pokémon Go creator raises $200 million ahead of Harry Potter game launch". TechCrunch. Archived from the original on November 24, 2017. Retrieved November 25, 2017.
  34. MacMillan, Douglas (May 26, 2016). "Snapchat Valuation Nears $18 Billion". Wall Street Journal. ISSN 0099-9660. Archived from the original on August 18, 2021. Retrieved August 18, 2021.
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