The Top 5 VC Bets Of All Time

These venture bets on startups that “returned the fund,” making firms and careers, were the result of research, strong convictions, and patient follow-through. Here are the stories behind the biggest VC home runs of all time.

1. WhatsApp

Facebook’s $22B acquisition of WhatsApp in 2014 was (and still is) the largest private acquisition of a VC-backed company ever. It was also a big win for Sequoia Capital, the company’s only venture investor, which turned its $60M investment into $3B.

2. Facebook

Facebook’s $16B IPO at a massive $104B valuation was a huge success for early investors Accel Partners and Breyer Capital. The firms led a $12.7M Series A into Facebook in 2005, taking a 15% stake in what was then called “Thefacebook.”

“Our general life experience is pretty linear. We vastly underestimate exponential things. . . When you have an up round with a big increase in valuation, many or even most VCs tend to believe that the step up is too big and they will thus underprice it.”

Today especially, it can be hard to see how Facebook was ever “overvalued.” While Facebook’s 2B active users is impressive, the company’s early exponential growth is even more impressive.

3. Groupon

Groupon’s IPO in 2011 was the biggest IPO by a US web company since Google had gone public in 2007. Groupon was valued at nearly $13B, and the IPO raised $700M.

4. Cerent

When Cisco acquired Cerent in 1999, the $6.9B deal was the biggest acquisition ever for a tech company. And for Kleiner Perkins Caufield & Byers, which invested $8M in the company, it resulted in a huge multibillion-dollar payday.

5. Snap

When Snap Inc. went public in March of 2017 at a $25B valuation, it was the second-highest valuation at exit of any social media and messaging company since 1999.

“At Benchmark we search for entrepreneurs who want to change the world, and Evan and Bobby certainly have that ambition,” Lasky later wrote on his blog, “We believe that Snapchat can become one of the most important mobile companies in the world, and Snapchat’s initial momentum — 60 million shared “snaps” per day, over 5 billion sent through the service to date — supports that belief.”

“Snapchat’s ramp reminded us of another mobile app Benchmark had the good fortune to back at an early stage: Instagram,” he added.

Want more? Check out the full report for 23 other VC home runs. You’ll read about how:

  • King Digital Entertainment, maker of mobile game Candy Crush, was acquired for $5.9B, resulting in a huge payout for Apax Partners, which owned 44%.
  • UCWeb was acquired by Alibaba, a prior investor, because they offered services that would help Alibaba triple their own valuation.
  • Alibaba grew alongside the early growth of the internet, helping to make early investor Masayoshi Son, today chairman of Softbank Group, the richest man in Japan and a tech titan in his own right.
  • JD.com took a huge risk by stepping into a major market and investor Capital Today made a $2.4B return by helping the company through a difficult financial time.
  • Delivery Hero beat out competitor FoodPanda and bought out the company from startup incubator Rocket Internet, which saw a nearly 3x return on its investment when Delivery Hero went public earlier this year.
  • Zayo became a large geographical aggregator in the fiber optics industry and generated a $480M return for investor Columbia Capital.
  • Mobileye built a successful company in Jerusalem, outside of traditional tech hubs, and raised money from non-traditional investors like Goldman Sachs.
  • Semiconductor Manufacturing International generated huge returns for investor New Enterprise Associates when it built a semiconductor company with an experienced team in a fast-growing international market.
  • Meitu recognized the need for local nuance in the value that its product offered — and early investor Sinovation Ventures saw 40x returns in the IPO.
  • Google grew through the bursting of the dot com bubble with the help of Kleiner Perkins Caufield & Byers, which held on to its early investment even when the market plummeted.
  • Twitter chose to partner with Union Square Ventures because USV had a clear vision for Twitter’s growth and potential, thanks to its investment thesis and firm conviction around it.
  • Zynga made social gaming history with a $7B IPO and generated huge returns for early investors like USV by building on top of existing social networks.
  • Lending Club made changes to its business model that created new opportunities for growth.
  • Genentech pioneered the biotech industry, which generated “one of the largest payoffs in history” for VC Kleiner Perkins Caufield & Byers.
  • Stemcentrx developed plans to minimize risk in the unpredictable biotech industry, and drew attention and funding from Founders Fund as they grew toward a $10.2B exit valuation.
  • Workday founder Aneel Bhusri leveraged his experience as a senior partner at Greylock Partners to eventually earn the investment firm a 9x return when Workday made its IPO.
  • Rocket Internet, the German incubator, received over $1.5B in private market investment, and proved a huge win for Swedish holding company Kinnevik.
  • Qudian was an early player in the Chinese alternative lending space. The company reached a $7.9B valuation within four years of inception, giving 34-year old CEO Min Luo a notable win.
  • Acerta Pharma developed its mantle cell lymphoma (MCL) drug in secrecy, and the promise of its breakthrough drug led to a $4B majority stake after just two quiet rounds of investments.
  • Nexon, the gaming giant, went public around the same time as its western rival Zynga, but relied much less on venture funding and reaped hefty returns from its backers.
  • Zalando was another major exit for Rocket Internet founders, the Samwer brothers. Both companies listed in the same week in what was called the “biggest week in the decade for tech in Germany.”
  • Ucar Group entered with a strategic partner into the rapidly growing ride-sharing space and its $5.5B exit was the biggest for a Chinese tech firm in the year.
  • Webvan‘s promise to transform grocery shopping via the internet attracted investors, and although it eventually failed, the company went public for over $4.8B during the dot-com boom.

If you’d like even more data on VC successes (and failures), be sure to check out the CB Insights platform or subscribe to our daily newsletter to follow the biggest news — and biggest disruptions — in the tech world as they happen.

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CB Insights

We build software that predicts technology trends. 619,000+ smart folks read our newsletter. You should too. http://cbi.vc/29OWq93