This article contains all the information related to the new fund deal that has been completed by 776 co-founders. It also includes other details about the deal, companies in the firm, the co-founder’s thoughts, and what it means next for the venture fund.
About the New Deal
Seven Seven Six, popularly known as 776, published today that it has signed on a $500 million fund across two vehicles for its second fund. The raise was “oversubscribed”, with $300 million going for investment startups at their initial phases and $200 million allocated for supporting companies at their developmental stages or once they begin breaking out, according to 776 founder Alexis Ohanian.
Reportedly, 776 only signed on its first $150 million funds which were also oversubscribed just one year before. It now has a $750 million amount of assets under control. In an email interview with TechCrunch Ohanian said that they observed noteworthy markups from their initial investments in the first fund and decided to raise this second fund quicker than expected and termed them as positive problems to have.
About the Companies in the 776 Firm
Today, the portfolio of 776 has more than 38 companies that have altogether raised more than $800 million in follow-on amounts. What is interesting is that the firm almost always stays ahead in the rounds it participates in according to Ohanian.
Brands in the 776 portfolios include Alt, which is another asset trading platform, Pipe, which is a worldwide trading platform that causes constant revenue lines tradable for their value throughout the year, Axie Infinity, which is a web3 play-to-earn e-gaming platform that saw more than 200x increase in the last year and Metafy, a video game education platform giving one-on-one reach to top-level gaming coaches.
The pipe was valued at $2 billion during the time of its previous raise and Axie Infinity at $3 billion last October.
Opinion of the Co-founder
Ohanian, who also co-founded Reddit and Initialized Capital, told The Wall Street Journal that 776 intends to invest majorly in crypto startups from its new fund and that 40% of its recent portfolio is composed of crypto-related companies. Crypto investments are already witnessing a good start to 2022 causing off-record hype in 2021.
When questioned to ascertain the crypto investments, Ohanian told TechCrunch that 776 implements the leads of the most skillful founders they come across. He also added that if they keep making in Web3, they will keep funding them. They are also noticing a firm focus on climate tech, space tech, food tech, and still good contemporary SaaS businesses.
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About the sources of 776 businesses, the investor said that for the time being it is a truly old-fashioned operation in which leads mostly come by email or message and then end up in Cerebro, the operating system which his firm has made. Ohanian said that it will enhance this year with some more products to broaden their top-of-funnel.
The Future Course of Action Based on the Previous Results
Cerebro is its starting product and is laid out to provide founders a way to find 776’s chain of 44,000 contracts and ask for an introduction with a single click. The concept behind the technology was easy.
According to Ohanian, they have an immense network that reciprocates their emails and it is not a good task for a human brain to be questioned like whether it knows someone on Twitter or a machine learning engineer.
Rather it is comparatively better to inquire about a database anytime one wants to. All of 776’s work lies there and that too is by design according to Ohanian. He told TechCrunch This makes way for clarity and accountability not just within their team but also with their founders and investors.
The aim is to scale the most valuable and most producible sections of their work first so that when they spend time with their founders it is the type of work only human beings can do well. When releasing the first fund of 776, the firm clearly said that it wanted a dispersed investor base, of which 50% identified as female and 15% as Black or native people.
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So how is it going? The firm asks all its LPs to take part in a bi-yearly, in-depth demographic survey. The latest survey divulged that 51% of 776’s LPs identify as female, 13% as Black or Indigenous people, and 10% as Latin. It does not contain any clear-cut founder diversity goals.
To increase its strategy in being a resource for founders, Ohanian said 776 has started giving actual receipts or monthly liability reviews, for the work it takes up for its founders. He concluded by saying that it is the exhaust from their engine.
