Holdovers from the 2015 unicorn boom continue to come forward, with Founders Fund becoming the latest VC to raise a mega-fund. The firm has reportedly raised more than $1 billion for its latest investment vehicle, a slight decrease in size from its previous fund, which closed in 1Q 2014.
Led by Peter Thiel, Founders Fund has made a name for itself with several major investments, including Palantir (Thiel is one of the founders), Airbnb (valued at $25.5 billion), SpaceX (valued at $10.1 billion) and Oculus (acquired by Facebook, also a former portfolio company of FF). The firm has now closed its last three flagship funds on $625 million or higher after not clearing the $250 million barrier for its first three.
In the past six months alone, 24 VC funds have closed on at least $500 million in commitments, including six on $1 billion or more; earlier this week, Accel closed two funds with a combined total of $2 billion. While mega-VC funds are not new, the vehicles closing now are launching in a somewhat unknown investment climate. When many began fundraising, the enormous growth in round sizes was causing investors to write larger and larger checks, resulting in larger funds. Yet because of public market volatility and a potential correction happening to private valuations, these recent mega-funds could find themselves struggling to deploy their entire value in the coming years.