Kleiner Perkins has played a remarkable role in the history of venture capital and Silicon Valley.
Over 47 years, the Sand Hill Road firm has made more than 900 investments, including early bets on Amazon.com (ticker: AMZN), Google, Twitter (TWTR), Genentech, Snap (SNAP), Netscape, Sun Microsystems, Square (SQ), Electronic Arts (EA), and Slack Technologies (WORK).
But a decade ago, the hiring of Mary Meeker from Morgan Stanley took Kleiner Perkins in a new direction, with a growing focus on late-stage investments. The strategy never quite aligned with KP’s more start-up, seed-round culture. Last year, Meeker left to set up her own shop, and Kleiner Perkins has since gone through a period of considerable change. The legendary John Doerr is in semiretirement. Once-prominent partners Bing Gordon, Randy Komisar, and Beth Seidenberg are now “advisers.” Neither Gen. Colin Powell (hired in 2005) nor former Vice President Al Gore (signed as a partner in 2007) play a significant role.
Last month, KP announced its 18th fund, a $600 million bet on early-stage investing. The tight focus on seed and Series A rounds is a Back to the Future moment for Kleiner—indeed, that’s the headline on a June blog post announcing the new fund.
Kleiner has retooled and streamlined, with five key partners driving the firm. The primary holdovers are managing partner Ted Schlein, a 23-year KP vet and IT security specialist, and Wen Hsieh, a “hard tech” expert who joined in 2006. The key new hires: Mamoon Hamid, who joined in 2017 from Social Capital; Ilya Fushman, hired in 2018 from Index Ventures, and Bucky Moore, a cloud computing expert lured away last year from Costanoa Ventures.
I recently met with Hamid, Fushman, and Hsieh at Kleiner HQ in Menlo Park, Calif., and later caught up by phone with Schlein, to talk about the new Kleiner—and where the firm is placing new bets. “We know what we are, and we know what we’re not,” Schlein says. “Everyone jelled. We’re all in the same business. It’s just kind of rocking.”
The firm is focused on four areas—enterprise tech, consumer tech, financial technology, and what Hsieh calls “hard tech,” companies focused on “fundamental new building blocks that are required in different industries to take them to the next level.”
Hsieh is Kleiner’s mad scientist, hunting down far-fetched ideas with tough odds but the potential to drive rich returns and significant global change. Hsieh is interested in space technology, which he says has traditionally meant building launch vehicles with a lot of “fanfare, smoke, and heat—a 20-story tall thing filled with liquid propellant.” He’s focused on SpinLaunch, a Long Beach, Calif., company that has raised $40 million to fund an “electric kinetic” launching system for low-Earth orbit satellites—basically a space catapult. Hsieh says the system should reduce the cost of launching a 100 kilogram payload from roughly $2 million to $4 million to $100,000 to $200,000. The catapult hurls stuff most of the way into space, using small booster rockets at the final stage.
Hsieh also likes Desktop Metal, a Burlington, Mass., company building a way to print metal parts at room temperature. The old way requires melting metals, casting them, and “machining the hell out of it and remove 90% of the material you don’t need,” he says, a wasteful and energy inefficient process. With Desktop Metal’s approach, Hsieh says, “you can print crankshafts on your desk with better mechanical properties than a forged or cast crankshaft.” He sees “huge implications for manufacturing costs, time to availability, and logistics and supply-chain inventory.”
Hamid, who like Fushman was an early investor in Slack, continues to see significant opportunity in creating new businesses focused on enterprise knowledge workers—a group of about one billion people—all looking for better ways to get work done.
One of his bets is Figma, a San Francisco-based collaborative design software company that has raised $80 million. Think of Figma as the equivalent of Google Docs in the once-staid world of word processing. Figma is collaborative, real-time, and all inside a browser—there’s no stand-alone application. “It’s taken off like crazy in the design community in the last year or year and a half,” he says. Figma is going after a market dominated by Adobe (ADBE), but Hamid thinks the real opportunity is broader. Ten years ago, he says, tech companies hired one designer for every 30 engineers. Today, the ratio is one for every seven engineers.
In digital health, Kleiner has bets on Livongo, a Mountain View, Calif., company focused on chronic disease management, starting with diabetes; Modern Health, a San Francisco company, which combines elements of meditation and psychotherapy to focus on “emotional well being,” delivering services through employers; and San Francisco-based Viz.ai, which applies cloud-based machine learning to read medical images and rapidly detect blockages in the brain.
Schlein is excited about Interos, which helps companies understand the risks in their own supply chains, digging multiple levels deep into the suppliers of your suppliers’ suppliers. Those risks could be anything from single-sourcing of key parts to the use of conflict minerals. Other security bets include Area 1 Security, an anti-phishing company, IronNet, an advanced threat-detection company founded by former National Security Agency chief Keith Alexander; and Synack, which tests network security with a crowdsourced group of contract white-hat hackers.
And then there’s Dust Identity, a sci-fi-sounding Framingham, Mass., company that uses diamond dust to create tiny tags to track goods in the global supply chain. The tracking dust is suspended in various media and dropped onto containers, art objects, or almost anything else. The dust has the cross section of a human hair.
Having survived some tough years, Kleiner has returned to its roots, and it’s confident about finding new diamonds in the rough.
Write to Eric J. Savitz at firstname.lastname@example.org