playground globalThe renowned early-stage venture capital firm has brought $410 million in capital commitments to Fund III to invest in early-stage deep technology and science companies. With this new fund, Palo Alto-based Playground will have more than $1.2 billion of his assets under management.
Co-founder and general partner Peter Barrett started his career as an engineer (a video game engineer, to be exact) before becoming a venture capitalist.Interesting fact about him — he still codes every day and is touted give Elon Musk his first job.
Barrett is surrounded by similarly tech-loving general partners Jolie Bell, Matt Hershenson, Bruce Leake and Laurie Yolar, all with similar deep scientific and operational backgrounds. I have.
Together, they are attracted to companies creating next-generation technologies across the computing, automation, infrastructure, logistics, decarbonization, and engineered biology industries.
Similar to the $500 million Fund II raised in 2017, Fund III’s capital deployment will focus on seed and Series A companies with initial investments of $1 million to $20 million.
Playground is often an early or first investor, and Barrett told TechCrunch that the company “believes that only a few transformative companies are born every year.” Examples of exits from the company’s portfolio include MosaicML, which was acquired by Databricks in June for $1.3 billion, and the company that will enable Elon Musk to print the Raptor engines to power Starship, which will be announced in 2021. Includes listed Velo3D.
TechCrunch spoke with Barrett via email about how the funding landscape has changed since his last round, the lessons he learned investing in deep tech, and what he looks for in startups.
The following has been edited for length and clarity.
TC: Playground last raised funding in 2017. What was the funding environment like this time around?
P.B.: The macro environment is difficult for everyone, but when I meet with investors from around the world, they avoid fads and trends and instead focus on companies and industries where real and lasting value is being created. I said I was trying. A company with excellent durability and defense.
The new fund and the raising of several of our companies have proven that there is never a bad time to invest in great companies, especially in a down market, with investors flocking to quality.
We have received significant support from our existing investors and also used this opportunity to invite new investors. Fund III expanded its LP base to include endowments, foundations, single-family and multi-family offices.
What is unique about what Playground offers to startups?
We are an early stage venture capital firm and have been true partners in our companies since our inception. When you talk to our entrepreneurs, you’ll find that they consider us both investors and co-founders. We have the unique superpower to take on and eliminate technology risks, and can leverage the roadmaps we develop to identify best-in-class emerging technologies.
And because we don’t invest in competing companies, there’s a real sense of camaraderie within our portfolio. We were introduced to several new portfolio companies by the founders of Fund I and Fund II. In addition to our platform services, our 70,000 square foot studio is home to many of our portfolio companies and other non-competitive startups deep in the tech space.
Tell us about the pivot from consumer to deep tech. What led to that decision?
When we founded Playground, our team was assembled with the goal of helping both consumer technology and deep technology companies develop. It was clear early on that our superpowers were not reading the market risk tea leaves and were taking on technological risks. By focusing on deep technology and investing in roadmaps that guide our investment decisions, we have captured an undeserved share of the world’s most innovative companies.
What did you learn from diving into deep technology?
Since we founded Playground, we have invested in deep technology companies. PsiQuantum was one of our first investments. We have learned that everything is impossible until it happens, and that the combination of prudent capital and brilliant, tenacious people can move civilization forward.
What areas of deep tech are you interested in, and which areas do you tend not to invest in?
By taking on chemistry, biology and computing as a first-principle approach, we can invest in breakthrough companies across next-generation computing, AI/automation, infrastructure, artificial biology and decarbonization. .
There is no contradiction between the resulting technology investment and significant returns. We are attracted to companies that can build large technological moats and enter markets where they are clear category leaders. We follow the roadmap and don’t surf the zeitgeist.
What do you look for in a startup?
We look for testable hypotheses that address important problems with a plausible path to success. We are not looking for potential solutions to problems. We look for solutions that bring together the right ideas, the right people at the right time.
How many investments have you made from Fund III so far?
Playground has already made several investments from Fund III including d-Matrix, Ideon Technologies, Amber Bio, Infinimmune and Atomic AI, in addition to other portfolio companies operating in stealth.
We believe that our companies, operating in stealth, are well-positioned to revolutionize green metal production and provide the foundation for the next generation of semiconductor manufacturing.
d-Matrix, whose Series A was led by Playground, secured an oversubscribed Series B round of $110 million announced in September, and has already raised another round. The company is building the next generation of AI hardware through an in-memory computing platform focused on inference in the data center.
Given your past relationship with Elon Musk, what do you think about his stewardship over X, Tesla, etc.?
We all wish Elon would focus more time on electrifying the Earth and sending rockets into space.
Source: techcrunch.com
