Facebook's first institutional investor, Peter Thiel, announced the closing of his new venture fund... [+]
After seeing Facebook through its initial public offering and concluding his teaching of an undergraduate class at Stanford University this spring, Peter Thiel announced the closure of a funding round on a new investment vehicle.
Late Tuesday in San Francisco, the PayPal cofounder and Facebook's first professional investor announced the launch of Mithril Capital Management, a growth-stage venture firm with $402 million under management. Thiel, whose net worth was valued at $1.5 billion by FORBES in March, will serve as chair of the investment committee, which will also feature partners Ajay Royan and Jim O'Neill.
"Mithril is a brand new growth capital firm," says Managing General Partner Royan, who previously served as a managing director at Clarium Capital Management, Thiel's hedge fund. "Our focus is on that inflection point dealing with companies that are beyond a startup stage and ready to scale and achieve dominance."
Thiel's newest undertaking comes at a time during which investor interest has soured toward internet technology companies like Facebook and Zynga, both of which have performed poorly since their public offerings. San Francisco-based Mithril also represents a divergence from Thiel's Clarium, which has lost more than 90% of its assets from its mid-2008 peak of about $6 billion on poorly-timed bets on oil prices and the U.S. dollar.
As of November 2011, Clarium had a total of $432 million under management, according to a financial document filed with the Securities and Exchange Commission.
According to Royan, Mithril will be different and completely independent from Clarium and from Thiel's Founders Fund, another venture capital firm. Calling it "the capstone" of Thiel's technology investment strategy, the managing general partner--born in India, raised in the Persian Gulf and educated in North America--says that the new firm will have a global focus and will seek out companies around the world that have the same drive as those nurtured in Silicon Valley.
We think of "Silicon Valley not as a geography, but as a mindset," says Royan, who has worked with Thiel since 2003. He points to Sony in 1985 and a budding Microsoft, just out of its startup stage, as historical examples of Mithril's main focus for possible investments: middle-stage companies with the potential for big growth. Royan says the firm is currently "looking at several situations quite actively" but would not name any specific businesses.
Royan would not disclose the other investors in the fund, but noted that Thiel had "one of the largest" stakes in Mithril,which is named for a metal used in armor in J.R.R. Tolkien's fantasy novel, The Lord Of The Rings. Two of Thiel's holding companies, which were listed on Facebook's S-1 before the Menlo Park, Calif.-based social networking giant went public, are named after references to the book.
We are are big Tolkien fans, says Royan, who adds that the firm was named after the fantasy metal because of its goal to "protect" and be "transformative" at the same time.
"We're focusing on something different and broad within the technology space," he says. "We're agnostic to any formal definitions of growth [and we're not looking for] a multibillion dollar valuation, but rather, does [the company] have the potential to grow an order of magnitude?"
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