Goodwater, one in all comparatively few corporations to focus completely on client tech investments, has closed on $1 billion in capital commitments throughout its fifth early-stage fund and its third opportunity-style fund, TechCrunch is first to report. The majority of the capital — 60% — might be invested in early- and seed-stage outfits.
The Burlingame, California, agency, which now has $3.3 billion in belongings beneath administration, has seen a handful of notable exits over its nine-year historical past. It invested within the lip-syncing app Musical.ly, which reportedly bought for upward of $1 billion in 2017 to ByteDance (which then shut it down and mixed it with TikTok). It additionally backed the Croatian math app Photomath, which Google agreed to amass final 12 months for an unknown quantity; it wager on the cash-back gives startup DOSH, which bought to the digital promoting platform Cardlytics for $275 million in money and inventory in 2021; and it invested within the customized vitamin firm Care/of, the vast majority of which Bayer snapped up in 2020 for an undisclosed quantity that valued the corporate at $225 million.
Based by veteran VCs Chi-Hua Chien, previously of Kleiner Perkins, and Eric Kim, lengthy of Maverick Capital, Goodwater has now backed 79 early- and growth-stage startups altogether throughout 19 international locations. A few of its most extremely valued portfolio firms at present embody the grocery supply firm Getir in Turkey, which has been gobbling up the competitors in Europe as its money-losing rivals are pressured to consolidate; Toss Financial institution, in South Korea, which was reportedly trying to elevate funds at a $3 billion valuation a number of months in the past; and the so-called neobank Monzo within the U.Okay., which has been via a few tumultuous years however continues to develop.
Considerably astonishingly, Goodwater has additionally issued checks to 600 seed-stage startups throughout 50 international locations via a platform it has developed referred to as Genesis that options “grasp class” stage programming through pre-recorded modules by the likes of Tinder co-founder Sean Rad and former Amazon exec Jeff Wilke, who additionally occurs to be a restricted companion in Goodwater.
To realize admission, groups want solely apply on-line; Goodwater’s minimal threshold for startups is that they’ve tens of hundreds of customers and tens of hundreds of {dollars} in preliminary income. There is no such thing as a cut-off interval. Kim makes use of the time period “open enrollment” to explain how the method works, then pokes enjoyable at himself for utilizing language that comes up at different Goodwater portfolio firms. In return, with the assistance of a platform staff composed of “dozens of engineers, information scientists, product leaders, and ML consultants which can be constructing a custom-made set of companies,” says Kim, Goodwater wrings out insights into dozens of geographies and concepts. (It additionally will get early entry. So far, Goodwater has written Sequence A checks to 6 startups to come back via its Genesis platform.)
That nine-year-old Goodwater stays dedicated to “client” is notable. Regardless of widespread curiosity in how tech can reshape how individuals expertise the world, an unsure financial atmosphere and rising buyer acquisition prices have pushed many enterprise corporations to dial again on funding services and products that rely on attracting and retaining particular person clients.
It helps that Goodwater’s definition of client tech is broad and consists of housing, healthcare, meals, monetary companies, transportation, schooling, and leisure. (Kim and Chien name them the “seven classes of human flourishing.”)
Investing globally offers them loads of robust choices, too, seemingly. That vary has led them into offers, for instance, like Stash, a New York–based mostly investing app for newbies; the worldwide reside leisure platform Fever, which is predicated in each Madrid and London; and a Seoul-based neighborhood social app referred to as Karrot. In truth, greater than half of Goodwater’s capital is dedicated to startups exterior North America, primarily in Europe, North Asia, and Southeast Asia.
Both manner, the pair say they’re assured of their technique of leaning in whereas others are working in the other way. Whereas they do not want to share their cash-on-cash returns thus far (“keep tuned” is mainly their response when requested), they are saying that addressing client wants won’t ever exit of fashion.
“We give it some thought from a primary ideas foundation,” says Chien. “If you happen to ask a billion individuals world wide what they want, each single one in all them wants housing, well being care, meals, monetary companies, transportation, schooling, and leisure . . . and we predict there are huge unsolved issues in bringing higher entry to higher-quality, lower-cost variations of all of these issues all through the world.”
