Chamath Palihapitiya, a former executive at Facebook Inc., made the first two investments for his new venture fund, buying stakes in business-software maker Yammer Inc. and private-stock exchange SecondMarket Inc.
Palihapitiya’s fund, called the Social+Capital Partnership, led a $17 million investment in Yammer, a San Francisco company that makes social-networking programs for businesses. The fund, which announced both deals today in separate statements, bought its SecondMarket stake from existing investors. SecondMarket lets investors trade shares of closely held companies before they hold an initial public offering.
After a four-year career at Facebook, where he worked on mobile products and expanded the company internationally, Palihapitiya left this year to form Social+Capital. The Palo Alto, California-based fund is raising about $300 million, with an eye to investing in Internet technology, health care, education and financial services. Prior to joining Facebook, he spent a year at venture-capital firm Mayfield Fund.
“The things I like tend to have very disruptive elements to an existing established infrastructure,” Palihapitiya, 35, said in an interview. “SecondMarket disrupts the IPO process by giving you completely different alternatives. Yammer is highly disruptive to established enterprise software companies.”
With today’s investment, Yammer has now raised $57 million. The company, started by PayPal Inc. co-founder David Sacks, provides software to more than 100,000 businesses in 160 countries, serving clients such as Royal Dutch Shell Plc and Ford Motor Co. (F) Existing investors include Charles River Ventures, Emergence Capital and U.S. Venture Partners.
“Social networking is destined to have as significant an impact on the enterprise as it has already had in our personal lives,” Palihapitiya said in the statement.
The SecondMarket deal, meanwhile, involving buying stock from employees and early investors, Chief Executive Officer Barry Silbert said in a blog posting. Shareholders of the New York-based company sold about $13 million of stock at a valuation of about $160 million, in what the company expects to be an “annual liquidity event,” Silbert said.
SecondMarket helps investors in privately held companies buy and sell their stock. The company has handled transactions totaling almost $1 billion, Silbert said today. Shareholders of Facebook, Twitter Inc. and LinkedIn Corp. have sold stock on the exchange.
Palihapitiya was joined by Russian billionaire Yuri Milner and actor Ashton Kutcher in buying the SecondMarket shares.
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