The firm typically writes checks between $500,000 and $4 million for seed and early Series A rounds, however it has done north of $10 million for later-stage growth rounds for companies already in its portfolio, said Ross Fubini, the firm’s founder.
“We go very deep with these companies,” he said.
XYZ normally looks for ownership stakes of between 12 percent and 20 percent in companies it invests in, Fubini said.
The firm has made about 45 investments to date, including 15 from the first fund and about 30 already from Fund II, Fubini said. While XYZ has not disclosed what was raised for the first fund, Fubini said Fund II is larger—a necessity as early rounds only have gotten more competitive.
“Dollars are just going up in seed and early (Series) As,” Fubini said.
Founded in 2017, companies in XYZ’s first fund now have an aggregate value of more than $6 billion, and it has backed 22 companies with ties to big data software developer Palantir, which went public this year and has a market of $47.2 billion.
In the first half of next year, XYZ should add about 10 more investments for the second fund, Fubini said.
XYZ—which has raised the money in its funds from large institutional investors, family offices and others—attempts to help its portfolio companies determine what to build and who to sell to, as well as connect them with investors to raise subsequent funding.
The firm will raise a subsequent third fund in the first half of next year, although Fubini, who has worked at other investment firms including Kapor Capital, Canaan Partners and Village Global, said he could not discuss any new fund in much detail.
“The velocity of deal activity is only picking up,” Fubini said.