![]() ![]() Investment institutions only hold minority shares and usually don't use leverages the target company would maintain a considerable and organic revenue growth.ĭifferences with venture capitals: the portfolio company usually has a proven business model, including products, technology and an existing customer base ideally, the company has, or expects to achieve positive EBITDA in the next 12-18 months.Įntrepreneurship (represented by Zuck for a long time) is the key driver of such assets. *If you are unclear about the definition of growth equity (the following definition references Cambridge Associates' 2013 article " Growth Equity Is All Grown Up "):ĭifferences with buyout funds: Founders still manage the company. Such demarcation sets apart modern tech growth equity from buyouts and traditional PEs - Instead of playing number games with historical financial data and EBITDA Multiple, investors bet on their imaginations by predicting future financial indicators based on tech company's current operation metrics. Derek Zanutto from CapitalG defined 2009 as the beginning of the current cycle, when DST invested $200 million in Facebook at a $10 billion valuation and continuously increased its shares, owning 5.5% of the company before its 2011 IPO. It hasn't been long since growth equity was considered a separate asset class. Shixiang looks at such a relationship from a different perspective and treats it as one of our missions: helping Chinese businessmen with better asset allocations, unleashing their time and energy into building the tech startup ecology, creating social value to the maximum degree, and promoting the progress of human society. Among the ultra tech billionaires, few people like Zuckerberg would treat their "wealth managers" as business partners and friends, which engenders mutual trust, saving time and efforts. Lastly, while reviewing the success of ICONIQ Capital, we found that its relation with Mark Zuckerburg is the crucial outset. We hope to connect successful entrepreneurs in China with the new generation of Chinese start-up owners around the world. In our opinion, such a support system among entrepreneurs is crucial during the "Grand Voyage in the Tech Ocean". Later on, it formed a recycle of resources with "mature entrepreneurs supporting the young". ![]() ![]() ICONIQ Growth initially leveraged LP resources from ICONIQ Capital. Hence we developed the original aspiration to promote the "Grand Voyage in the Tech Ocean" for Chinese entrepreneurs and investors. During the last quarter, our team visited top VCs in Silicon Valley, where we perceived the confidence for another 10 years of investments and startups in Cloud, SaaS and Data. ICONIQ started investing heavily in software companies since Fund I, which we also see as a promising strategy. It's not only because of the taste for assets : Studying ICONIQ Growth has a somewhat unique meaning for 「Everything Unicorn」, as ICONIQ Capital and ICONIQ Growth have always been the benchmark and role models for Shixiang. ![]() You may find answers (or at least some) in this article. How will it cope with macroeconomic headwinds against growth assets in the primary market? When other multi-phase comprehensive funds also hold billions of dollars, how does ICONIQ Growth differentiate itself to face the game? How did ICONIQ Growth achieve all these? In addition to Betas in software and growth strategy, what Alphas did it create by virtue of the ICONIQ ecology, non-consensus cloud judgement, and post-investment assistance? Here, we intend to probe deeper into the matter with a more systematic and comprehensive analysis: With over $1 billion AUM, both funds in 20 achieved around 10x Gross MOIC, 2x DPI, and top 5% vintage year Net IRR.Įven for the few articles concerning ICONIQ Growth, discussions were only limited to its business performances. ICONIQ Growth ranks among the top-performing growth funds. Although LP and GP peers remained skeptical about family office investment, ICONIQ Growth significantly expanded its single fund AUM in the last decade, from $600 million in Fund I to $6 billion in the recent Fund VII. It proved to be ICONIQ Capital's most successful business strategy. It invested heavily and earned big on top-notch SaaS companies like Procore, Datadog, Adyen, and Snowflake. ICONIQ Growth seized the golden decade for growth investment in software companies and became the biggest winner in the industry. ![]()
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