NFX’s Fund III, its largest fund to date, and one of the largest pre-seed and seed-focused funds ever, doubles down on early seed stage startups focusing on a broad range of sectors including fintech, marketplaces, gaming, proptech — and now a greater focus on crypto and tech-bio
SAN FRANCISCO–(BUSINESS WIRE)–October 5, 2021–
NFX, the leading seed-stage venture firm, created for Founders by Founders based in San Francisco and Israel, today announced a $450 Million Fund III dedicated solely to pre-seed and seed-stage startups, making it one of the largest funds of its kind to date.
NFX was founded in 2015 by serial entrepreneurs who founded and built 10 companies that exited for more than a cumulative $10 Billion. They also have invested in companies like Lyft, Doordash, Patreon, Poshmark, Mammoth Biosciences, Twist, Trulia, lastminute.com, and others. NFX invests in businesses driven by network effects and manages $875M in total assets.
As startup opportunities reach new highs driven by new technologies and accelerated digitization, network effects based companies – those where a product, service or platform gains exponential value as usage increases – account for approximately 70% of value creation in tech, but are still poorly understood. As the #1 source for information about network effects, NFX pairs this knowledge with other resources to help take founders from idea to IPO. NFX plans to leverage this new fund to build a stronger network and services to help founders get even further, faster in an increasingly competitive market.
“At NFX, we lead with a Founder-first mindset because we were Founders ourselves. The early days of a company are many of the most critical and challenging. Founders not only need smart support from those who’ve lived this life, they need access to a robust network, practical tools and a highly sought-after and engaged community. We see so many exciting opportunities ahead and are now looking forward to continuing to support even more founders in the future,” said Pete Flint, NFX General Partner.
Fund III is projected to support an additional 70 companies whose founders specialize in fintech, marketplaces, gaming, and proptech sectors, and increases investment in tech-bio and crypto. At $450M, Fund III ranks as the firm’s largest to date, having raised $275 million for Fund II in 2019 and $150 million for Fund I in 2017. NFX leads or co-leads investments and is the first institutional investor in 95% of the companies it backs and roughly 15-20% of their investments are in pre-seed.
As part of NFX’s commitment to growing its tech-bio portfolio, Omri Amirav-Drory, Ph.D. and Founder of NFX backed Genome Compiler and VC fund Tech.bio, is being promoted to General Partner of NFX, leading the firm’s division dedicated to companies at the intersection of biology and tech. Amirav-Drory splits his time between the SF Bay Area and Israel. Emily Leproust, Ph.D, co-founder and CEO of Twist Bioscience, is also part of the NFX Bio Investment Committee.
“Now is the time to back Scientist-Founders at the intersection of biology and technology solving our civilization’s most pressing challenges in health, sustainability, food and the environment. We at NFX Bio team are Scientist-Founders, so we understand the science quickly and have experience in starting and scaling tech-bio companies. We back founders at the pre-seed and seed stages, we lead rounds and we make decisions quickly,” said Amirav-Drory. “Tech-bio platform companies will be exceptionally impactful for the future of humanity.”
NFX Fund III also bolstered its crypto expertise, adding Morgan Beller as General Partner last year. Beller is the co-creator of Diem (fka Libra), the cryptocurrency effort launched by Facebook, previously worked in corporate development at Medium, and was a former partner at Andreessen Horowitz. “You can’t have crypto without network effects. Understanding network effects – and the ability to bake in certain principles from the pre-seed/seed stage – gives crypto founders a real advantage. No one is better at understanding that than the NFX team,” said Beller.
Since Fund I, NFX has grown from three GPs to five, from 16 employees to 45, and opened offices in San Francisco, Israel and Palo Alto. “The addition of Morgan and Omri gives us unparalleled expertise in two of the most exciting areas in technology over the next 10 years: Crypto and tech-bio, and allows us to support founders in these fields even better than before. Coupled with our dedicated staff in recruiting, publicity, marketing, HR and legal, we’re in a unique position to support founders at the earliest stages and help them in scaling their business. Having Omri on the ground in Israel part of the time shows our ongoing commitment to the Israeli tech ecosystem,” said Gigi Levy-Weiss, NFX General Partner.
According to General Partner James Currier, “NFX is focused on providing the single best support for a small group of founders at the earliest stage of their development. To support our broader mission, we are also building an ecosystem of free software tools, content and services to support every single founder regardless of if they are backed by NFX or not. Hundreds of thousands of founders and investors use our free tools on a monthly basis, including BriefLink, which simplifies the fundraising process and has already helped companies raise over $4B. BriefLink is integrated with another widely used free product we built for the ecosystem called Signal, which is a network of 11,000 top investors, VCs, Scouts and Angels. Having these tools at their disposal is critical for founders so they can successfully fundraise from the best investors.”
NFX is a leading seed-stage venture firm based in San Francisco, CA, and Herzlia, Israel. Founded by entrepreneurs who built 10 companies with more than $10 billion in exits across multiple industries and regions, NFX is transforming how true innovators are funded. With expertise in platforms and network effects, NFX partners with the world’s best founders to solve problems – at scale – with the power of technology.
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