Former Social Capital VCs make their first investment as new fund Tribe Capital

Arjun
Sethi (left), Jonathan Hsu, and Ted Maidenberg left Social
Capital to start their own fund, Tribe
Capital.
Social Capital and Melia
Robinson/Business Insider

• Tribe Capital, the new venture firm founded by partners
  who quit Social Capital en masse, is co-leading a $22.7 million
  investment into a hot cryptocurrency startup.
• The firm is leading the investment alongside Social
  Capital, which was founded by former Facebook
  executive Chamath Palihapitiya. It suggests no hard
  feelings between the two.
• We know a little bit more about Tribe Capital’s
  activities now. The firm will focus on internet and software
  companies and use data to make better investment bets.

Social Capital, one of Silicon Valley’s most
buzzworthy venture firms to emerge in recent years, has
seen an exodus of top partners over the summer. Now, many of the
departed are joining forces to launch a new fund,
Tribe Capital, which just made its first investment.

Sfox, a startup
whose platform brokers cryptocurrency purchases for high-volume
traders and institutional investors, has raised $22.7 million in
a Series A funding round, led by Tribe Capital and Social
Capital. Tribe Capital’s cofounder Arjun Sethi will join the
board.

Y Combinator, Khosla Ventures, Brock Pierce’s Blockchain Capital,
and SV Angel were among participating investors.

That former Facebook executive Chamath Palihapitiya’s firm,
Social Capital, would lead the investment alongside those VCs who
fled the firm says a lot. Sethi left Social Capital on “good
terms,” sources with direct knowledge of the situation
told Business Insider last month.

It’s been a tumultuous year at Social Capital, where
Palihapitiya has made a series of abrupt and jarring changes
in strategy. Five partners, including one of the firm’s
cofounders, Ted Maidenberg, quit the firm in the span of a few
weeks,
causing concern among some founders who have taken money from
Social Capital.  

Some of those Social Capital defectors are back in the game with

an investment in Sfox, a company that’s dedicated
to solving the problems that prevent high net worth
individuals and institutional investors from
buying cryptocurrencies like bitcoin. Sfox has already processed
$9 billion in transactions since its 2014 founding.

Maidenberg, Sethi, and Jonathan Hsu, who led
quantitative investing and data science activities at Social
Capital, are the cofounders of Tribe
Capital. 

According to Sfox’s announcement, “Tribe Capital is a global
venture capital investment firm focused on internet and software
investments leveraging data and technology to partner with great
founders solving hard problems.”

Tribe’s data-driven approach is unsurprising given Hsu’s
expertise. His data science team at Social Capital was tasked
with using data to find, evaluate, and manage companies in the
firm’s portfolio.

Tribe Capital aims to crack data-driven investing better
than before.