Fabrice Grinda says he never intended to run a risky business. He really (really) loved investing in angel investing. In fact, in late 2013, when he was about to sell the global classifieds marketplace OLX — his third venture — he says he had already written checks to more than 150 startups with his longtime friend, serial entrepreneur Jose Marin. “We have always worked together. It was really a family office that did large-scale angel investments,” Grinda recalls.
Noting that a flurry of checks, potential LPs including strategic investors, family offices and founders began to express interest in investing with them, and in 2016 a Norwegian telecommunications company Telenor offered to provide a exclusive funding to the duo, giving them $50 million. invest for this purpose.
Fast forward, and their team, FJ Labs, has grown from a two-man team to a sprawling company of 34 employees, including eight investors and four “full partners.” It began to seriously expand in 2018, when LPs pledged to invest $175 million in the outfit. Now, Grinda announces that FJ Labs has raised $260 million in capital commitments in a pre-seed fund and a “Series B and beyond” fund, with support from family offices, institutional investors and a wide range of founders, including those from LinkedIn, PayPal, Supercell, TransferWise, MongoDB and Wayfair.
Indeed, over time, FJ Labs has become less of a “laboratory” and more of a traditional venture capital firm, though Grinda rejects the comparison. “We are a venture capital fund,” he says, but doing “angel investing at the venture capital scale. We don’t lead. We don’t set prices. We do not take seats on the board. We decide after two one-hour meetings over the course of a week whether we are going to invest or not because we have extraordinary pattern recognition that allows us to decide extremely quickly.
That sounds very risky in a world where founders sometimes fudge the numbers, but FJ Labs has results to show for its approach. Among his many investments, for example, he bet very early on outfits that have exploded over time, including Alibaba, Coupang, Flexport and Delivery Hero.
Focusing on network effects markets and companies – which Grinda knows well – certainly helps. The same goes for the portfolio that FJ Labs has built over time, which includes 900 active investments in what Grinda describes as the “largest market portfolio in the world”. (Data from PitchBook confirms that FJ Labs was the most active venture capital firm in the world in the third quarter of last year.)
Everything relies on itself as its own kind of flywheel, Grinda suggests, pointing to the company’s deal flow to underscore the point. Across FJ Labs’ 900 companies, he has ties to about 2,000 founders, and they “come back for their next ventures and send their friends and employees to us,” Grinda says.
Likewise, because FJ Labs is a “source of differentiated deal flow for VCs, they invite us into their deals,” he says.
FJ Labs will grow even bigger if all goes according to plan. Grinda says that “the idea is to create an institution that will be a legacy and will exist ‘for decades’.
It’s hard to imagine Grinda, who is notoriously itinerant, staying in venture capital for so long. But he says believe it. Right now, FJ Labs would like to solve three problems while making money, and none of them are minor. The first is inequality of opportunity, the second is climate change and the third is the “crisis of mental and physical well-being”.
A related bet is on User Interviews, a seven-year-old Brooklyn startup that helps user experience researchers find study participants by different demographics and behavioral criteria. (TechCrunch covered its latest funding here.)
Other startups don’t fit easily into one of those three buckets, including Gravitics, a year-old Seattle startup that develops living and working pods for space travel and has announced a round of tabled $20 million last year, and a year-old London-based blockchain infrastructure company that just raised $8.5 million in seed funding to build private sharing capabilities for blockchain networks.
Many of the company’s bets simply come down to FJ Labs’ perspective on what the future of humanity looks like, Grinda offers. “We have a perspective on the future of food, automobiles, real estate, work. . . We try to solve the problems of the world; we are also motivated by the thesis.
Update: The original version of this story erroneously reported that a former angel investment partner of Grinda was his OLX co-founder, Alec Oxenford, who is also a serial entrepreneur and investor. You can read more about what FJ Labs is funding and why in a story we published last month on the outfit, before FJ Labs shut down its new funds.