In the early months of the pandemic, Michael Abramson returned home to Texas to plot his next career move. A former partner at storied venture capital firm Sequoia Capital, he'd kept a low public profile despite investments in flashy startups like beauty retailer Glossier and delivery app Rappi. Hoping to maintain that quiet approach in his next endeavor, he pinged a friend with a similar penchant for privacy, and billions of dollars to invest: WhatsApp billionaire Jan Koum.
Today, with Koum’s support, Abramson quietly leads Newlands, a firm that has rapidly grown into one of the largest new funds in tech. Abramson and Koum haven’t spoken publicly about Newlands, and the firm does not appear in recent funding announcements. Its corporate website is little more than a shell. But regulatory filings reveal a firm that holds nearly $10 billion in public equities, mostly tech stocks, and is beginning to make investments in the early-stage startup ecosystem.
Forbes Senior Editor, Alex Conrad joins 'Forbes Talks' with Diane Brady to discuss the mystery of Newlands' history and big players.
Today, with Koum’s support, Abramson quietly leads Newlands, a firm that has rapidly grown into one of the largest new funds in tech. Abramson and Koum haven’t spoken publicly about Newlands, and the firm does not appear in recent funding announcements. Its corporate website is little more than a shell. But regulatory filings reveal a firm that holds nearly $10 billion in public equities, mostly tech stocks, and is beginning to make investments in the early-stage startup ecosystem.
Forbes Senior Editor, Alex Conrad joins 'Forbes Talks' with Diane Brady to discuss the mystery of Newlands' history and big players.
Category
🤖
TechTranscript
00:00 Hi, everybody.
00:03 I'm Diane Brady.
00:04 I'm here with my colleague Alex Conrad, who has an exclusive out on a secretive new investment
00:09 firm that's being bankrolled by WhatsApp billionaire Jan Koum.
00:13 Alex, good to see you.
00:15 Tell us more about this firm.
00:17 Yeah, it was a fun scoop.
00:21 We found a filing, Diane, that basically showed that this firm called Newlands, which is a
00:26 complete ghost on the Internet, nothing on their website, even the investors' LinkedIn
00:32 profiles don't have photos attached, really low profile.
00:36 It had almost $10 billion in public tech stocks, which they have to disclose to the SEC.
00:43 We were like, "What is this firm?"
00:45 And then we dug around and we discovered that it is, at least the vast majority of it, is
00:51 the money of this billionaire, Jan Koum, who forms values at $15 billion after he sold
00:57 WhatsApp to Facebook almost 10 years ago.
01:00 You know what's unusual in reading your stories?
01:03 First of all, I can't decide, is it a family office or is it a classic investment firm?
01:10 It doesn't seem to really meet the criteria for either.
01:12 How would you describe it?
01:14 That was one of the things that I thought was fun about this story.
01:18 Frankly, I felt like it was a little bit of a mystery because venture capitalists, including
01:23 some who used to work with the guy who is managing this fund, a guy named Michael Abramson
01:27 who used to work at Sequoia, arguably the most famous VC firm in the world, they called
01:32 it Jan's family office.
01:35 The venture industry, they were talking about it like it was a family office.
01:38 Then I spoke to family office experts and they were like, "This doesn't look like a
01:42 family office at all.
01:43 It looks like a sophisticated hedge fund."
01:47 Trying to understand what it was, was part of what we found so interesting.
01:51 I think that what it really is, is kind of a investment vehicle that Coombe is bankrolling,
01:57 but could aspire to be a lot more than a traditional family office, which might be doing everything
02:02 like buying your car or hiring your nanny or sort of managing your financial life.
02:08 What's interesting, a lot of family offices have been investing in private equity, even
02:12 the fact that it's investing in these public big name stocks, I mean, Meta, Tesla, Alphabet,
02:19 DoorDash.
02:20 That in itself is unusual and I'm wondering if it's, I was going to say Canary in the
02:26 coal mine, I guess I should say oil well, right?
02:28 It's based in Dallas.
02:31 Is that first of all emblematic to you of anything about the state of these particular
02:35 stocks because they haven't exactly had a roaring year?
02:39 It's a great point, but I would say that if you look at their equity holdings over the
02:44 past year and we do get to see a few quarters of filings now, they've really invested a
02:49 lot of money going from $3 billion and change to almost $9 billion.
02:55 Part of that is because they keep pouring more money into these stocks, but also the
02:57 stocks have appreciated somewhat over the course of the year.
03:01 They were hammered so bad last year that some of these stocks like Meta have actually done
03:06 pretty well this year.
03:08 Something we heard from sources was that this guy, Abramson, who is friends with Coom from
03:13 when Sequoia backed WhatsApp a decade ago, that he is all about the risk reward profile.
03:19 For now, he has seen these public tech stocks as undervalued this year and that's why they
03:24 were putting so much money in.
03:25 But we do believe that they're going to be investing a lot more in startups.
03:29 That was one thing that we also found interesting here was that we're starting to hear their
03:32 name in the startup community, but we don't think that they want startup founders to be
03:37 admitting that they're taking their money.
03:40 So the startups, you mentioned CloudFuse light up in FTX.
03:44 Can I start at the third, FTX?
03:47 Bankrupt?
03:48 Yeah.
03:49 What do you make of that?
03:51 Yeah, it could be on the filing, it should be WTF, not FTX.
03:57 But basically, Michael and the Sequoia folks still know each other.
04:03 And it's my understanding from sources that FTX was a big Sequoia investment.
04:09 And then also as Newlands was formed in 2021, they also invested, they were listed in an
04:14 FTX filing as one of the firms that would be approached for an emergency fundraise that
04:20 obviously never happened.
04:22 So yes, there are only a couple traces of Newlands startup investments.
04:26 And this is one that they would probably not want out there.
04:30 So is this almost like stealth mode?
04:34 It's hard to say because they didn't respond directly to your queries.
04:38 But I'm curious about the fact that they're so private.
04:42 Well there you go.
04:44 But it's not unusual for family offices to stay pretty quiet, because it's almost like
04:48 none of your business.
04:50 Investment firms, the opposite.
04:51 Certainly when you're investing in startups, you want to promote those startups.
04:56 And part of it's having high name, you know, big name investors like these.
05:00 What do you make of this sort of obsessive privacy?
05:04 Do you think it's temporary?
05:08 You know, it's fun.
05:09 I got to go back to a cover story that Forbes did in 2014 about Yonkoom around the time
05:15 he sold the company to Facebook now Meta by a former colleague of ours named Parmi Olson.
05:21 And in it, he talked about how when WhatsApp first made the top 20 of the App Store, all
05:28 the employees celebrated and Yon did not.
05:32 Because he said that marketing and press kick up dust and basically create noise, you know,
05:37 that you should not seek out attention.
05:40 And I think that really speaks to what he and this guy, Abramson, have been going for
05:44 with Newlands.
05:45 They just want to invest with no profile, no publicity.
05:49 I think they wish they had even less of a public profile than they do because they had
05:53 enough breadcrumbs for us at Forbes to sniff it out.
05:55 And I had help from a number of our colleagues in doing that.
05:59 But, you know, I think that this is just their preference, that they want the money to just
06:03 be deployed, let the founders speak for themselves, and they'd prefer to keep their names out
06:08 of it.
06:09 Well, I suppose in one respect, good for them.
06:12 Can I step back just to the 30,000 foot look for a second, because, you know, a lot of
06:18 wealthy, you know, billionaires who've made it, they can become angel investors, they
06:23 go into private equity, they have family offices.
06:27 Give me some sense of how, you know, how does some context around, you know, how he invests
06:34 relative to some of his peers?
06:38 Absolutely.
06:40 So I think this represents what experts told us was maybe like a new generation of wealth
06:46 management where you do see some family offices and high net worth individuals being a little
06:51 more sophisticated or braver in backing a bunch of public tech stocks, investing in
06:58 other funds, investing in startups.
07:00 And that degree of sophistication, according to the people I spoke to, often would come
07:05 for a family office, maybe in its second generation, or maybe after it had been around for a long
07:09 time.
07:10 It wouldn't be a shock if a tech billionaire tried to speed run that and basically get
07:14 really sophisticated right off the bat.
07:16 But we've also seen some influential hedge funds start with, you know, one billionaire
07:20 kind of seeding them and getting them off the ground.
07:23 Several of the employees at Newlands per LinkedIn worked at Maverick Capital, which is a firm
07:27 also in Texas that was founded by a tiger cub coming out of Julian Robertson's, you
07:33 know, network of individuals, Tiger Global being probably the most famous tiger cub.
07:38 And that was also bankrolled by a then billionaire who later went bankrupt.
07:42 So they obviously don't want that history to repeat itself.
07:46 But this is either a new look family office, or it's this kind of sophisticated investment
07:51 vehicle that one would use instead of one.
07:54 And I think it's really interesting to just see if this will be an outlier or other people
07:59 will try to do the same thing.
08:01 Great.
08:02 Well, definitely read the story.
08:03 I think it's intriguing, and I'm intrigued to see what they invest in next.
08:06 So thanks for joining us, Alex.
08:09 Yeah, maybe next time they'll talk to us, but we'll keep reporting either way.
08:13 Thanks, Diane.
08:14 Excellent.
08:15 Talk to you soon.
08:16 Bye.
08:16 Bye.
08:17 Bye.
08:17 Bye.
08:18 Bye.
08:18 Bye.
08:20 Bye.
08:21 Bye.
08:22 [BLANK_AUDIO]