If anyone thought the collective spending spree on defense tech was coming to an end any time soon, think again.
Over the weekend, Bloomberg reported that Founders Fund—the 21-year-old VC firm co-founded by Peter Thiel—raised its fourth and largest fund to date: A $6B fund dedicated to later-stage companies, including another big bet on Anduril, the firm’s marquee defense tech portfolio company.
Eagle eye: Founders Fund is about as much of a household name as it gets in the defense tech VC world.
The firm, co-founded by Peter Thiel way back in 2005 with a $50M first fund, was the first institutional investor in a couple of tiny startups you might’ve heard of, Palantir and SpaceX, and has been Anduril’s most consistent backer to date.
Besides the literal billions of dollars the fund is sitting on, a few things make FF stand out in the increasingly crowded defense VC ecosystem:
- They’re known for very selective, concentrated investments, often backing only a handful of companies per fund. Defense portfolio companies include Anduril, Nominal, and Hadrian.
- A big chunk of the capital they manage—roughly 20 percent—comes from their own partners and employees. In this new fund, $1.5B comes from FF’s team, and the remaining $4.5B from LPs, including sovereign wealth funds.
- They also tend to reserve a lot of capital to back their existing portfolio companies.
Big bucks: All that is continuing with their new $6B growth fund, which they raised less than a year after closing a $4.6B third fund. FWIW, this is the fastest new raise in the fund’s history.
- With their third fund, FF backed seven companies with an average check size of a cool $600M. Aside from a $1.25B bet on Anthropic, the capital was put into existing portfolio companies, including $1B to Anduril (co-founded by Founders Fund GP Trae Stephens).
- The new fund will be similarly selective, with the firm planning to back roughly a dozen companies over two to three years.
A big ‘ole chunk of this fresh cash is reportedly going to FF’s old pals over at Anduril.
According to The Information, FF is putting about $624M into Anduril’s latest funding round, bringing the firm’s total investment in the big-time neo-prime to at least $2.6B since its seed round in 2017. Pocket change, really.
And this isn’t even the biggest fundraise of the past few months—big name VCs have been on an absolute tear. Since the start of the year, Sequoia Capital raised about $7B, Thrive Capital raised $10B, and Kleiner Perkins raised $3.5B, a big chunk of which went into Saronic’s $1.75B Series D.
What was that about a bubble?