Growth Equity Enters the AI Debate

In March, the release of GPT-4 sent the VC ecosystem into a frenzy. Investors were all asking the same question: which new companies were going to make it big? Capital poured in. By one estimate, VCs invested almost five times as much into Generative AI startups in the first half of 2023 as they did during the same period last year (Source: Pitchbook). Several Generative AI startups took advantage of the fundraising rush, raising hundreds of millions of dollars without a single cent of revenue. 

Now, it is time for us to have a say. TCV seeks to invest in companies which have proven product-market-fit, a history of execution, and sustained revenues. Over the years, we have made many AI investments, but we have not yet made any native Generative AI investments. That time is coming. So we wanted to offer our thoughts on the risks and opportunities in the AI space as we see them. 

What are we talking about, in its simplest form

Source: TCV

Recent AI tools are so impressive that it is easy to get carried away with the “what ifs.” We are asking ourselves: to what extent are we buying the hype? And to what extent are we seeing a paradigm shift in technology? So far, we see the following strengths, weaknesses and opportunities: 

Just don’t believe the hype 

LLMs are enormously powerful, but they aren’t a silver bullet (yet) 

Source: TCV

To focus the discussion further, in a recent internal exercise we assessed which business characteristics were a) weaknesses and b) strengths in the era of AI. The full table is shown below, but a few themes stand out: 

Weakness 1: Publicly available data. Some companies draw on large bodies of freely available text and images. They aggregate it, curate it, and then deliver content to customers. This business model directly competes with many Generative AI models, which scrape the internet to train themselves. The problem is that Generative AI models do it better. 

True, these companies will often say that, on top of the publicly available data, they are creating their own content. An AI chatbot would, though, make exactly the same argument. 

Weakness 2: Routine cognitive tasks. In analyzing the labor market, economists classify jobs as being either routine or non-routine, and cognitive or non-cognitive. Routine cognitive jobs account for about a quarter of total jobs across the United States. These are jobs which require some element of brainpower, but where there is little creativity, accuracy does not have to be perfect, and the job on day 1 is similar to the job on day 2. 

Some businesses are highly reliant on routine cognitive tasks. For example, personalization, translation, and localization services can be automated by AI at near-zero cost. So too can repetitive data entry and processing tasks. The same goes for content creation, if the product is something that merely has to be “good enough” rather than genuinely compelling. 

Weakness 3: Old-school AI. There are numerous examples of AI systems being deployed at scale. Just consider the autocomplete function when searching on Google. Some building-management systems use AI to help with heating and cooling. Some worry that the providers of these services will soon be outcompeted by the vastly more capable tools associated with Generative AI. 

Value-at-risk framework

Characteristics that might cause a business to be more vulnerable to AI disruption/disintermediation

Source: TCV

Strength 1: Trust. A growing share of services in the modern economy could be described as YMYL – or, “your money, your life.” These are things where you cannot afford for things to go wrong, such as healthcare, education, and insurance.

In these industries, the barriers to adoption of AI could be high. Managers will be nervous to trust something that is almost human, but not quite human. In addition, these industries are often highly regulated. As a range of evidence shows, technological progress in highly regulated industries tends to be slow. If you’re still filling out paper forms when you go to the doctor, how likely is the practice to adopt Generative AI any time soon?

Strength 2: Network effects. Companies that rely heavily on understanding customer data have a virtuous compounding moat. These companies can focus on using AI to augment human capability through their own channels. Proprietary data and processes can be used to build better algorithms or models. These companies will drive AI use cases, rather than be displaced by the technology.

Strength 3: Human-to-human contact. If customers have an emotional connection to a brand, this often requires emotion, high-touch sales, or some other form of personal interaction. As of today, AI cannot fully replicate human connection – and may never be able to do so. The same is true where content is predominantly about shared experiences and social capital.

More trivially, AI is unlikely to disintermediate companies that rely on physical services. We believe tradespeople like electricians and stonemasons are well-positioned to weather whatever comes next.

Conversely, sustainable moats framework 

Source: TCV

Given these risks and opportunities, what should growth companies do today? This is a question that companies pose to us on a near-daily basis. First, the company should consider whether AI can provide a real advantage. Second, the company should explore the best path to a production use case. This often means combating human capital limitations, addressing data privacy concerns, or having some ability to accurately evaluate model performance.

Where we hear problems arise in the LLM toolchain

Source: Arize, TCV

Here’s how to think about incorporating AI. There are, we believe, many potential barriers to adoption, as the table below outlines. 

Key limitations

LLMs and Generative AI have shown impressive potential, but there are limitations that may hinder widespread adoption

Source: TCV

In the short term, companies can draw on publicly available LLMs – large language models – like GPT-4 to start thinking about proof of concept. That is all well and good, but the proper use of AI goes far beyond simply using the occasional chatbot. Instead, it involves the full-scale reorganization of firms, as well as their in-house data. What does that mean in practice? At a lower level, it means leveraging a publicly available model with context from the company’s own data and products. At a higher level, it means training or fine-tuning a foundation model, where the company maintains full control and ensures data privacy.

Selecting the right approach to LLMs 

Source: Arize, TCV

Operationalizing AI efficiencies is also top of mind for our portfolio companies. It is not lost on us that the best performing companies will be those that continuously think about their cost structures and how to leverage new technologies to improve margins. Some of our portfolio companies are creating “synthetic P&Ls” to understand what their optimal cost structures could look like by leveraging AI, while other bestin- class companies are employing AI “SWAT teams” to ascertain how they might use AI internally and in their products.

Future P&Ls? 

Source: TCV

We are still at an early stage. The world has quickly moved from traditional AI systems to Generative AI. Things are bound to continue to change, and over time our thinking about the risks and opportunities of AI will continue to evolve. We look forward to receiving your comments.


The views and opinions expressed herein are those of the author and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”). This blog post is strictly for informational purposes only and is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by TCV or any of the securities of any company discussed. TCV has not verified the accuracy of any of the data or statements by the author and disclaims any responsibility therefor. Any TCV portfolio company identified in the blog post is not necessarily representative of all TCV investments, and no assumption should be made that the investments identified were or will be profitable. For a complete list of TCV investments, please visit For additional important disclaimers regarding this blog post, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at

The API Economy

APIs are seen as the cornerstone of modern software applications, as they allow developers to efficiently stitch together multiple services and build better apps faster. With the continued rise of microservices architectures and cloud computing infrastructure, APIs are the main way in which software interacts with software, both within and between organizations. Today, developers are spending more than half of their time on APIs, underscoring how important APIs are to modern software development.

Microservices architectures decompose applications into smaller services that can be independently managed and updated. With services now organized around business lines or functions, microservices offer increased flexibility and modularity, making applications easier to develop, test, deploy, scale, and maintain. As companies increasingly leverage microservices and engage with third-party and open APIs to create applications, the volume and complexity of enterprise API footprints are exploding. In web development, serverless architectures are abstracting away backend infrastructure behind APIs, which is leading to a decoupling of the backend from the frontend. These trends underlie an unbundling of the software stack and a move towards API-led SaaS, where software is consumed in smaller component parts. 

There has also been a recent emergence of new web API protocols/frameworks like GraphQL and gRPC which enable a step-function improvement in performance, leading to the creation of new types of applications. As a result of these shifts, an entirely new infrastructure software layer around API development, management, networking, monitoring, and security has emerged (see below landscape).

GraphQL has been widely adopted by large enterprises like Facebook, Yelp, and GitHub, who have reported significant improvements in application performance and developer productivity. With GraphQL, developers can specify exactly what data they need wrapped in a single request, reducing unnecessary, repetitive data fetching and improving overall application performance at scale. This attribute is especially advantageous for large-scale applications with numerous front-end clients that require high-performing data retrieval.

GRPC is another modern API protocol that is gaining popularity amongst developers. It is a high-performance, open-source framework for building remote procedure call (RPC) applications. With GRPC, developers can write efficient, fast, and scalable distributed applications, enabling microservices to communicate with each other. GRPC also supports a range of programming languages, making it a versatile option for application development.

As APIs have come to the forefront of application development, tooling around building, authenticating and testing APIs and writing their documentation have arisen in the form of collaborative software platforms. These companies emphasize the collective power of the engineering community towards faster and more robust API development, improved governance, and tighter security downstream. The growing overall trend towards sharing data externally, spurred by API-first businesses, has contributed to the growth of API marketplaces that provide a place for developers to upload, distribute and monetize their APIs as well as provide a space for consumers to discover and implement APIs for their own products.

In microservice architectures, apps are broken down into a network of back-end services that perform specific business functions. Both open source and commercial product offerings have developed around the concept of service mesh – the management of inter-service communication that will only grow in complexity as additional microservice applications are built. New innovations have also arisen around the API Gateway in terms of routing efficiency, security, real-time tracking and scalability.

The rapid proliferation in both closed and open API development has led to a corresponding rise in security concerns. APIs are now commonly used as a primary target for attackers, as they are directly used to access underlying sensitive software functions and data sources. Existing cybersecurity solutions like Web Application Firewalls (WAFs) and older models of API gateways do not offer comprehensive coverage.

Security leaders note identifying, inventorying, and securing APIs as a critical pain point within their organizations, and see implementing API security solutions as a top priority over the near term horizon. 

As more organizations recognize APIs as the building blocks of modern software, we believe tooling and services around API design, testing, security, and networking will continue to advance and capture developer mindshare. 


This thought piece was originally shared with TCV’s TCXO community. TCXO brings together executives across functional domains to share best practices, unpack challenges, and foster networking opportunities. Members will have access to exclusive TCV content, events, and programming. Sign up to here to join the network.

TCV named a GrowthCap top growth equity firm

TCV has been named a Top 25 Growth Equity Firm of 2022 by GrowthCap Advisory. Read more about TCV and see the full list of winners here.

Disclaimer: This award is not indicative of any future TCV fund performance. TCV paid a one-time fee of $7,450 to participate in the publication of the results of the GrowthCap Top 25 Growth Equity Firms of 2022 List, which was issued on 3/2/23. Other third parties or investors may disagree with this award. An award may not be representative of a particular investor’s experience.

Acquired Podcast: Jay Hoag on the Netflix’s journey, building TCV, and investing through downturns


We had the rare opportunity to interview Jay Hoag, cofounder of the first tech crossover investing firm, TCV, at TCV’s Engage Summit in Half Moon Bay earlier this fall. Jay and Rick Kimball started TCV back in 1995 and have been part of the private-to-public journeys of storied companies like Netflix (which Jay shares some great war stories about on this episode), Spotify, Zillow, Expedia, Facebook, Airbnb, Peloton and many others. Jay and TCV were kind enough to let us release the conversation as an Acquired LP episode, and we’re excited to share it with all of you. We cover the firm’s history, how companies should calibrate the magnitude of their future-looking product investments (a topic we didn’t realize would end up being so timely) and perhaps most importantly, pivotal moments where now seemingly unstoppable companies almost died amidst big macroeconomic changes. We hope you enjoy!

Episode Transcript

Ben: Hello, Acquired LPs. We had the rare opportunity to interview Jay Hoag, who is the founder of TCV, the firm originally known as Technology Crossover Ventures.

David: This was so cool. Back on our Altimeter episode, Brad Gerstner referenced Jay and TCV as the original crossover investors and still among the very very best out there.

TCV was founded back in 1995 and they were the first firm that invested in both public and private companies at the same time from the same fund. Jay has some awesome war stories that we get into with companies like Netflix, which we talk a whole lot about with him. Spotify, Zillow, Expedia, Facebook, Airbnb, Peloton, and many, many others.

Ben: The firm obviously looks much bigger today and very different than it did in 1995. They have over $20 billion in assets under management, 50 people on the investment team, 140 employees total. We recorded this episode live at a private summit that TCV had for their portfolio with all their chief product officers and we asked them if we could release it as an acquired LP episode and they were kind enough to let us.

This interview covers a little bit of firm history, some pivotal moments where important companies in our world today almost died amidst big macro economic changes, which is what’s that like? We also touched on the topic of how to think about the magnitude of future-looking product investments that a company should make. Now with that, this is not investment advice, do your own research, and onto our interview with Jay.

David: It’s a rare chance that we get to interview the legendary founder of TCV.

Ben: I know we’re in a closed room here, but this doesn’t happen very often. You tend not to be on stage despite having an unbelievable amount of experience to share.

David: Literally, the magnitude of your impact goes to our hotel rooms tonight. Ben texted me a photo when you checked in.

Ben: It is wild walking into the hotel and of course the TV’s on because it’s a hotel and they always have the TV on with some promotional something when you walk in. The first thing you do is grab the remote, you’re like shh and you go to turn it off. I went to push the power button, but the most prominent button on the remote is not a power button, but a Netflix button. A standard button on a remote control shipped by an OEM who makes a television. That had to be the investment thesis?

Jay: Totally. That’s the idea.

Ben: It has to be unfathomable based on where that company started and slowly inched its way to literally be the one brand on many TV remote controls today. It’s wild.

Before we get into Netflix and a lot of companies that you’ve worked closely with, and built TCV in your own entrepreneurial journey, we wanted to start back with your upbringing. Over to you.

David: Tell us a little bit about where you grew up, what your family was like, and we’ll see some of the threads come through with that.

Jay: Well, it’s great being here. Thank you for having me. I’ll try not to bore you too much. I guess I’m the least likely person to ultimately be a technology investor for now 40+ years. To date myself, I grew up in the Midwest. I was in high school in the ’70s and graduated from college in the ’80s. There was no technology. If you think back, not only was the Internet not commercialized and there were no mobile phones.

David: There was no Internet.

Jay: It wasn’t until 1980 that the fax machine was invented and the VCR. Not only do we not have email, as an example, we didn’t have voicemail. I grew up outside Chicago and then went to a high school in a little town in Wisconsin with 5000 people. The technology we had was a stoplight. Halfway through high school they installed a second stoplight. It totally blew people’s minds. People were just cruising through and just ignoring it.

Ben: A hundred percent year over year growth.

Jay: Exactly. Didn’t know what to do about it. In college there were no PCs and even in business school, just to again date myself. I went straight on from undergrad to business school so it was 1981 and 1982 in University of Michigan Business School, the University of Michigan.

David: We won’t talk about that.

Jay: We’ll get to the Ohio State Michigan rivalry in a minute.

Ben: I’m a Buckeye.

Jay: We learned to program on punch cards. These were mainframes. It’s an arcane thing. There was no first computer so it was a very strange time before most of the technology.

David: How did you end up going from that environment to first to Wall Street? You joined Citi right after business school?

Jay: I describe it as a sequence of very fortunate events as opposed to the books of unfortunate events and a series of lucky moves/choices. I’ll try to do it briefly. Actually, the first luck was I grew up in a middle class midwestern family, and for whatever reason I had a good work ethic. Middle class being, I was going to go to college, which is born on second base as opposed to hitting a double. That was the first bit of luck. Meandered through my college life and had one single offer coming out of college which was to sell insurance, and decided maybe that’s not the thing.

I applied then to business school and law school. I got into a better business school than law school. At the time, the rankings were parents wanting to be a doctor, a lawyer, and then a business person, in that order. So, didn’t go on a long one, business school.

I was meandering through that and I had a professor named Dave Brophy who taught an investment class that got me interested. He got me off my full college and business school experience to start to focus. Then I applied to 102 jobs coming out of business school, had three offers and one of which was being a research analyst at Citi, which became Chancellor Capital over time, so 1982, and an equity research analyst, an old fashioned analyst, which ultimately gives you a lot of fundamental grounding.

The additional piece of luck was I wasn’t assigned when I started in any industry. They just showed up and they offered that I could cover Paper & Forest Products. This was covering public stocks, paper forest products. At that time, I don’t even remember who it was, the publishing companies at the time were McGraw Hill and Standard & Poors. I like to say I knew all equal amounts of all three which is to say nothing.

Ben: It was not sexy to pick technology. It was not like an obvious oh, I should go do that.

Jay: No, it wasn’t sexy. It also wasn’t necessarily sexy to go into the investment business. One of my old bosses said his biggest professional accomplishment was keeping his job between 1974 and 1982 because generally the markets moved sideways. 1982 was a bear market.

David: If I remember right, these are the days of like mid-teens interest rates, right?

Jay: Yeah.

David: People are freaking out about the world going to 4.5%.

Jay: At the time Ronald Reagan was President and my first office job was the summer of ’81 between business school years at an investment firm and I vividly remember that short term interest rates were 18%.

David: My god.

Ben: That’ll keep home prices down.

Jay: That’ll keep a lot of things down.

David: That will make the investment management business a lot less sexy. How did you start first investing in private companies? Was that just natural of technology being such a young industry?

Jay: Again, I started as a research analyst at Citi. My clients were portfolio managers on the institutional side and on the high net worth side, and did that for three years. Then in 1985, I joined the venture group at the time, which invested in venture funds, directly invested in companies, and then had a small cap public effort. Then over the years I ended up running the technology portion of that. That was the business model.

At the time, the prominent venture funds included Kleiner Perkins. My contemporaries were folks like John Doer and Brook Byers were older, so it was more Kevin Compton and Doug Mackenzie at Kleiner. Benchmark had not started, Andy Rachleff at Merrill/Pickard, Bruce Dunleavie there as well, Bob Kagle came from TVI.

Ben: As a side note, it is amazing how many of these are no longer brands. We think about a lot of venture firms as these big enduring things, but the venture landscape is just littered with people that raise fund one and fund two. Even the enduring firms stopped and new firms were born.

Jay: I have respect for Sequoia who’s done multi-generational shifts over a very long period of time. When the internet bubble burst and subsequent the fact that we survived, one of the biggest professional accomplishments sometimes it’s literally just surviving. Here we are in our 27th year.

It sounds maybe overly dramatic, but it’s not always clear because there are a lot of funds that either perish firms or peak and then have a long gestation period of less than stellar.

David: We’re going to just talk about a company or two that had some of that journey in a minute.

Ben: What was the first time that you saw success in doing public and private investing at the same time and you thought I might be onto something. There really could be a durable future here because I’m learning things from doing this that I wouldn’t learn by doing just one or the other.

Jay: I’d say if you think about the late ’80s probably, which actually was when I met Reed Hastings of Pure Softwares, it was Pure Software at the time.

Ben: Was it Chancellor investment? Reed’s first company?

Jay: Yes. It’s really important to be lucky early on and then just keep following great entrepreneurs around.

David: One of the big themes on Acquired and even to this day—it’s still true today but must have been so much more back then—was it’s a small number of people who create a huge amount of value in this world. Most people don’t know that Reed had a company before Netflix. Getting to know him then gave you a great seat for later.

Jay: We had plenty of not great investments, some of way back in the ’80s investment. We invested in Sybase, which was the original online transaction processing relational database, Ingres, which was a successful but less successful than Oracle relational database, and Intuit which is crazy. Intuit’s business at the time ultimately sold off and totally transformed the company.

The reason I go through some of those is because those ended up being successful private companies and then successful companies in the public markets as well. The companies that are able to sustain rapid growth over a long period of time, including in the public market, can generate substantial returns.

David: Was it partially because you were within a large Wall Street investment bank that there wasn’t this pressure from the LP base and the funds to distribute stock from private companies as they went public and you were able to keep going with them?

Jay: If you’re spending all this time identifying what the most promising trends are within technology, identifying the best companies, investing in a bunch of them privately. Their growth prospects don’t end when they become public so maybe you should be patient and be long-term partners with those companies. But also, all that work can lead in periods of dislocation to an opportunity where you might deploy capital publicly via pipe, or just taking a stake, or taking a stake and becoming an active board member.

It’s so economically rational in part because markets are volatile and things go in and out of investor favor, so it makes total sense. The receptivity on the part of the USM community varies because it’s well-liked and understood in bull markets, and it’s generally not liked in bears like right now where everything’s under intense pressure.

Ben: Anytime you’re doing anything that’s a little bit divergent or disruptive, you get lots of rope and bull runs. Then if you take a risk, then that’s the opportunity to get penalized during those down periods. I think it’s so interesting to study the down periods, the moves people make, and the risks people think are worth taking in those down periods.

I want to zoom in on 2000. Netflix is getting ready to go public, but they’re not going to be cash flow positive before they go public and the market’s falling apart. If my history is right, you put together a financing for Netflix that it might be fair to say it saved the company and the company wouldn’t exist today without this financing coming together.

I’m curious. When you think about those moments where tens of billions of dollars of value is created in the future, but of course you don’t know that, but you’re willing to take a bet that even though everyone’s looking at me with the most scrutiny that they ever could, I’m still going to take this risk. How do you analyze a situation like that?

Jay: Of course, we wish they all worked out the way Netflix did. Experience does have some benefits and I was less experienced then. But the ability to be balanced in one’s view, which often can mean contrarian not consensus, and ignore conventional wisdom or ignore the headlines because right now it is an example as was true then.

The press headlines were just horrific around all things technology, and just to set the stage for it, my old firm back with Reed Hastings when he was at Pure Software, which was a very successful software company back in the day. They did error checking software for programmers. They acquired another company and went public and they ultimately got, I think it’s still part of IBM’s software efforts.

Netflix did ever increasing financings from 1998, 1999, 2000, and raised a lot of money and filed to go public in March of 2000 on the heels of 300+ tech IPOs in 1999—it’s crazy. Then the nuclear winter hit for all things internet-related, which is a little crazy to think about today because you have Amazon and those businesses weren’t bad. They were just subject to investor psychology swings.

Ben: Which is important. The dogs were eating the dog food. People were loving these services and yet everything was overvalued, so you had this weird situation where as long as you could survive, people kept wanting your product, but you had to survive.

Jay: Now there were a lot of companies from that era that didn’t. There were some bad ideas funded. There were some good ideas funded that their order book just went away. We were invested in a couple companies that help people build websites, which sounds arcane, and then a lot of the world didn’t need websites built short term.

I do think it’s one of the benefits of and for all people focused on the consumer and focused on products. If you have a compelling value prop that is quite evident, then it is worth funding even if the world doesn’t think it’s worth funding.

The story I tell, which is true, they pulled the IPO. Netflix was pretty close to breaking even from a free cash flow standpoint, which is the really important measure of breaking even, but needed additional capital. Our conversations with Reed are that we said we will provide that capital, but you may not love the valuation, so please go out and do a market check on what others might value Netflix at. The psychology was so negative that the answer was nobody would provide any capital.

We did a recap financing where we and others who participated were able to increase our ownership. Ironically, the company never really needed the capital. They turned free cash flow positive pretty quickly, so I’m glad their forecasts were off. Then they went public in 2002. Even there, the stock traded down on the IPO.

David: How long did it take before that investment became clear that it was truly a great investment?

Jay: Eight years, probably. It wasn’t until 2009 or 2010. Investment originally went on the DVD model, which I’m happy to go into, and then the company started investing in streaming in 2005. Although originally it was actually digital delivery because it wasn’t clear whether a download model or a streaming model was going to be for choice.

Ben: I remember installing Silverlight so that I could download the digital delivery of the Netflix movies.

Jay: It doesn’t get a lot of headlines now, but we started investing in streaming in 2005 and part of it was Reed is a student of technology history and things like Innovator’s Dilemma from Clayton Christensen if you’ve read the book, and had to observe and not to pick on AOL, which was original online service and it was dial up. As broadband occurred, they didn’t forward invest. They just harvested the dial up.

David: They also sent a lot of discs through the mail.

Jay: Netflix, we chose to forward invest early and it wasn’t clear how big streaming was going to be, but the cost of missing it and underinvesting was potentially fatal.

Ben: The sin of mission.

Jay: Yeah. Streaming was launched in 2007, maybe this is when you downloaded Silverlight. It was PC-only, not even Mac. It was about a thousand titles that nobody cared about. In contrast, for some arcane legal reasons, the DVD service was every movie and TV show ever made.

David: Was that the first sale doctrine?

Jay: Yeah, because video stores like Blockbuster, way back in the day, could buy every DVD so therefore so could Netflix. Streaming was a pretty limited content offering, but they stayed at it and it was free. It was added onto your DVD subscription. But it really wasn’t until 2010 and 2011 that it was clear it was going to be successful. Then the company hit the gas from a content spend standpoint.

Ben: Bet the company moves are very common when a company is in a terrible position. Apple betting the company on the iPod, or the iMac or the iPhone. The MacOS 9 was a dead-end platform and it was going nowhere, so it didn’t actually cost much to bet the company. This costs a lot because you’re reinvesting a lot of what otherwise could be free cash flow into something that would be very difficult to try and understand the TAM.

What do you think about, at that time an investor in Netflix, but now as a prospective investor in new companies, not only does this have product/market fit, but I believe that this thing could be huge. What’s your calculus around that?

Jay: Well, I also say, it is also as a sometimes current public board member with companies who are going through the same calculation, which is how much do I forward invest in the future thing or expanding the product roadmap, so that the value prop in 3–5 years is quite different than it is today and much bigger compared to moats.

I do think it’s really hard for most companies, but particularly for most public companies to do that. I think Netflix is an extremely positive example. There are others as well. It is mandatory, but I think many companies, once they get public, start playing defense, playing a little safe, with such an emphasis obviously on quarterly earnings. The thought of reinvesting half of your profits into some unknown future thing is pretty daunting.

David: Do you remember either for you and TCV at that moment or within the company for Netflix, what was the work that you did to get conviction, that this new whole paradigm with a whole different business model that the prize was big enough, that this would be so much bigger than our current market in DVD streaming, that it was worth this risk to the company?

Jay: You’ll probably be disappointed in the answer because the question implies a level of detailed quantitative analysis, maybe not in evidence. That to me is what makes great founding entrepreneurs CEOs. They envision a day when they would be not shipping DVDs. Actually, they still are today looking at the bandwidth expansion and iPhone was also introduced in 2007, but obviously there were cell phones before that with consumption on handheld devices.

It took a lot of guts to do that. They recently talked about, particularly with the original effort, that they’re competing with studios that have been around for a hundred years. In the last decade, effectively they, in the original side, built up a catalog to rival that.

You talk about huge forward investments. Everybody who’s a Netflix subscriber, in fact benefited from that value being delivered because it was forward investing to provide great customer delight and then more subs allows you to spend more on content. More content allows you to get more subs, and so on.

David: Which is so interesting because that was so different from the Blockbuster model. With the doctrine of first sale, Blockbuster and the first iteration of Netflix could just ride along with whatever Hollywood produced and not have to worry about investing all of that money, all that dynamic that you then later learned of more subs and investing in more content. You could be a small DVD rental business and have access to everything, but the minute you’ve moved to streaming, all of that changed.

Jay: Early DVD days, it was not always totally clear that Netflix could be a runaway success. If you think way back when it was requiring changing consumer behavior, something that a lot of companies contemplate. Yes, you could get all the DVDs in the world. The advantage of the online model was you don’t have physical stores, so you don’t have the burden. You have an infinite supply, so you’re not limited. I think a typical Blockbuster had like 800 titles or something.

The downside though was people for years got in their car and went down to Blockbuster, or on the way home from work, Bob or Mary went by a Blockbuster to get something to watch that night. The idea of the Netflix queue, which was to list all the movies you want to watch, and then when we rolled out a subscription service, three at any time you watch one, you return it, the next one shows up. That took a while to actually take in the consumer’s minds. What do you mean? What is this all about?

Ben: Because you’re asking them to shift their behavior, their model for how I think about what movie I’m getting.

Jay: Yeah, it’s going to be a spur of the moment. Blockbuster is considered a very intimidating company to compete against, but they were not consumer-friendly. Their north star was not delighting the customer including the late fees.

They also maybe strangely were quite profitable at one point. It’s that same issue of do you invest a massive piece of your physical store profit into this DVD online business or do you milk those economics? It took them a while. They ended up being a significant competitor for some period of time.

Ben: And having a real advantage in the fact that if you want to go get another movie right away, instead of waiting four days to mail it back in and to get it back, you could just go to a store and swap it instead.

Jay: Yes, but that load was a whole other set of issues that I think constrained their ability to forward invest. They had a series of different CEOs who maybe pursued different strategies. Then some of the stuff they did was in hindsight, to me at least, was just hair brain. At one point, their solution to digital delivery was you would go into the store and download a movie onto your USB.

You’re like what? That’s not consumer convenience. The other thing I’d say, even about the streaming business on Netflix, is that it surprised me to this day, because it was not a secret. It took probably four years to really become a much more compelling value prop. But the company, we’re doing that in the public eye, and we can talk about the financing in 2011 was due to a dislocating event.

David: We go into that next.

Jay: But I still am surprised. We did have an activist investor in Netflix at one point, Carl Icahn.

Ben: Who was the same activist investor in Blockbuster around the time they were competing with Netflix?

Jay: I don’t know if it was around the same time.

David: I think he was part of the Blockbuster.

Jay: I think the fact that a strategic acquirer did not try to come after Netflix. It still surprises me to this day because once it was pretty clearly successful…

Ben: You just wait for it to become cheap enough, then try and take it out.

Jay: You would think. There was that opportunity in 2011.

David: We’re building out the Acquired merch store, and right now we just have t-shirts that say Acquired.

Ben: This is not a commercial.

David: This is not a commercial.

Ben: It’s just an opportunity for us.

David: But we really want to add t-shirts that have our favorite quotes from the years we’ve done the show on it. One of our favorite quotes is Barry McCarthy’s quote from this time. What happened for folks who don’t remember is that the Quickster, the spinoff of the DVD business, that Wall Street was not very receptive to.

Ben: Public backlash, strategically made sense but received very poorly, and the company had to like very quickly recover and figure out how do we not abandon all these customers.

David: I believed this story. You can correct us if it’s wrong. Barry McCarthy, the CFO, was set to retire and then this happened. He said on an earnings call, when asked why he wasn’t retiring, he said you don’t leave your friends in the middle of a knife fight. Is that true?

Jay: I think so, yeah. Just to broaden out the time. In 2011, so long streaming ’07, built the content catalog, supported more devices including partnering with Microsoft on the Xbox as a delivery mechanism at one point, then Sony, and Nintendo, and then ultimately having Netflix everywhere on all devices including a remote control in your hotel room. Then forward investing in content for streaming without charging for it. It was bundled in with your DVD subscription.

In 2011, two important strategic decisions. One to start charging for streaming. In the consumer’s mind, read that as a big price increase. Then rebrand the DVD service as Quickster and spin it out. That decision was changed and remained as part of the company.

The price increase, to your point, I think was the right strategic decision because it would allow the company to forward invest more in content and get that flywheel even going further, but there was a great human cry. I think consumers often respond emotionally to price increases.

Ben: Or redesigns.

Jay: Actually, the irony there is that when prices increased in Netflix’s history, folks were grandfathered for a year or two, and some of those people canceled. It wasn’t happening to them. The stock was down 70%.

Ben: It’s uncorrelated with the public markets.

Jay: It was a benign time.

Ben: Right now, when you say the stock was down 70%, you’re like yeah, so is everyone else.

Jay: That’s true. Also, from a business standpoint, I think 22 million subs went to 19 million. It was a nervous point in time. The company was just about to launch in the UK to pull back on that. It ended up pretty quickly stabilizing and then subs group fairly soon thereafter. If you think back, it’s super easy to say that was an easy decision.

David: This is when you let a public investment in the company.

Jay: But you think about from a business model standpoint, big fixed content obligations, shrinking subscriber base. Oops.

Ben: That’s what operating leverage goes wrong. You want operating leverage when you’re a high growth business, but as soon as that’s not true, oh my God, this is a big problem.

Jay: The underlying analysis of well, streaming is the future. We’re clear leaders. We’re clearly providing tremendous value to the consumer. Some of them are canceling right now, but we’ll be through that. At the time, Netflix was US and had just launched in Latin America. There were big growth vectors across the globe. You couldn’t extrapolate data points because we weren’t in Europe or various parts of Asia Pacific, but you could envision this value prop being applicable there.

David: That subsequent international growth story for Netflix is I think one of the not as well known and told growth stories, but it’s one of the greatest of all time. How many countries is Netflix in now?

Jay: One hundred ninety-five, I believe.

David: There are not many more countries than that in the world.

Jay: It has been everywhere other than China because China has some constraints. I figure now also excludes Russia.

Ben: Can I generalize a little bit? We’ve got the leaders of the incredible products and growth teams in the room. How would you generalize some learnings around when it makes sense to continue to forward invest in something that’s not yet proven and when the experiment is showing enough data where you’re like let’s focus on the core business?

Jay: There’s a bias. I don’t think great technology companies cannot forward invest in both the current product roadmap as well as you can’t run the risk that this is true of Facebook when they had no mobile ad unit. It just went public. Can you afford not to invest there?

I have a dinosaur story in a company called Ascend Communications, which was one of the original building blocks of the Internet. There was an Ascend box in every point of presence across the country as it was being built out. But that was a technology called Inverse Multiplexing, whose first application was in data networking and sold a million dollars. They forward invested specific features for points of presence in building out the internet service provider network and that was hundreds of millions of dollars.

To me, it’s a matter of degree, how much can you experiment with new things? Obviously, today as appears to back then, you can iterate and test a lot. I also do think using the consumer as the north star, everything you do, even if it’s short-term financial, should be with keeping that consumer in mind as opposed to nickel and dime them along the way. It was counterintuitive at the time, but if you think back to the current cable model and AOL and others, it was or is almost impossible to cancel. You had to call the help desk and they would try to bait and switch you.

David: John Malone famously used to say something like he would look at the percentage of revenue that was spent on customer support or customer service and he would fire people if it was too high. He was like I want it to be as low as possible because I don’t want to have the worst customer support possible.

Jay: Obviously, that’s one strategy.

Ben: That’s why we all love cable companies.

Jay: The short-term maximization, but I was going to say when Netflix first rolled out the DVD offering and then streaming, it was one click cancel online, which is viewed as insane by Wall Street because you’re going to make it easy for your consumers to churn? The answer was in your term, yes, but they’ll come back.

Ben: I’ve probably churned as a Netflix customer 50 times and I’m currently a Netflix customer.

David: 50?

Jay: I thought this was a successful podcast?

Ben: To me, the only economically rational thing to do is always cancel all of your subscriptions all the time and then always feel free to restart whatever you want to watch a piece of content. I don’t know if that’s okay.

Jay: As a board member, I probably can’t do that. It would be viewed as disloyal.

Ben: You could imagine Netflix making that call enabling this weird consumer behavior that I have where I don’t even think, and yet I’ve paid thousands and thousands and thousands of dollars to Netflix because I trust them as a brand that I have a good deal with.

Ben: You should see my tweets about the New York Times. Anyone ever tried to cancel your time subscription? That is a nightmare.

David: Yeah, it is very difficult.

Jay: Again, public companies, another modern day example on Netflix in two things, analysts can’t seem to get through the fact that are you going to release things in the theaters? That’s where people want to see movies. They’ll occasionally do a limited window, but it’s not where people want to go.

People want to go to the movie theater, great, but the vast majority of consumers see it at their home. I think it’s because Hollywood has the year of a lot of analysts and they can’t seem to get through that. It’s not actually a major issue at all, it’s a minor issue.

The other thing is the binging model. Company articulates that some of the biggest hits like Squid Games would be hard to envision unless there was a lot of talk in the zeitgeist. A South Korean drama being successful across many of those 195 countries if it was one episode every week. Binging allows massive awareness hit, a positive hit, and of course, somebody could binge through it and cancel if they so desire. It’s a legacy question.

If you’re an ad-supported model—maybe like Game of Thrones—you do want to appointment TV once a week, but I think most of the world is moving beyond that. But they still get questions as to why not release one episode a week.

David: I want to maybe ask Ben’s question in a slightly different way. Ben’s question of when should you forward invest for growth as a tech company? When should you not? We have an audience of product and growth folks in the room. I want to ask you maybe in a more native to TCV as an investor way that I think might also shed light as operators for companies.

Many, if not most of TCVs legendary investments have followed this Netflix-like path. I’m thinking about Peloton now. I’m thinking about Airbnb during the pandemic. I’m thinking of Zillow through all this. You are as a firm and personally as an investor, not at all shy about making a call when the chips are down for a company that this company is going to persevere and continue to be a fast grower in the long run. I’m sure you don’t always make the call to do that.

What are the key factors as you think about whether you’re going to double down on some of those situations versus not?

Jay: This will sound like motherhood and apple pie. It starts with the CEO and the team. I think particularly public markets swing wildly from genius to idiot. Folks, it’s the same team.

Ben: You were telling me before, it’s always funny that you can see whatever the story, the narrative, the press wants to perpetrate by what picture they pick. It depends what cycle we’re currently in. If it’s the frowning picture or the smiling picture of the genius CEO, but it’s the same CEO.

Jay: I haven’t tried to prove that scientifically, but I’m pretty convinced it’s accurate. The same person but a different picture. We start as a private investor. Often the teams aren’t complete, and then over multiple years there’s change if you read Reed’s book on No Rules Rules.

But the visionary CEO who hires superb people sounds simple. Then when you work with them over a long period of time, you’re gaining confidence. They may actually make the whole decision, where it starts and ends.

It’s also really trying to reassess the product, customer delight, competitive moats maybe would be the second big variable, and the team gets into the ability to execute. There are many companies across technology history who had equal opportunities. Some execute superly, some don’t. Market cap difference is quite dramatic. I say you have to, particularly if you’re buying more of a public situation that is under severe pressure, you have to be comfortable being viewed as an idiot for some period of time.

Ben: Which is wholly counter to everything that evolutionarily has led humans to where we are. We’re the people who were the descendants of people who were not viewed as idiots, so it’s really hard to rewire your brain to be like I’m super comfortable being ostracized.

Jay: It isn’t always easy.

David: You don’t say it’s fun.

Jay: It obviously derives from you need to have really high conviction and you can’t be viewed as an idiot forever.

Ben: Eventually if you’re non-consensus, you need to become consensus, but you need to place that in the background.

Jay: Or most importantly, in that quadrant of consensus or not consensus, right or wrong, you have to be right no matter what you do.

David: Ben talked about this in a recent episode. I love it. I think it’s true. You have to be non-consensus and right, but can’t be in the non-consensus part of it for too long or else that becomes wrong, even if you’re right.

Jay: That’s the other angle and hopefully the current environment is an example. When you look back at market dislocating events like the global financial crisis or the Netflix history in 2011 as an example, when you look back at them, they’re actually pretty short. When you’re in the middle of it and the clouds are rolling in the thunder and lightning can seem really daunting. But I can’t think of a single great technology company that didn’t struggle at some point. I refer to it as desert disillusionment.

They were in this nice plush forest. They went in and I was in the desert and there were scary animals and there’s no water. Some might die, but I think Netflix went through that. Expedia, on 9/11, there were negative booking days. Think about that. It’s not like revenue slowed down. Airbnb, negative booking days. Again, not all coming up.

David: Now we look back at that now and that was like a month, but it probably felt like 10 years.

Jay: Facebook, no mobile hand units.

David: The Facebook example is a great one.

Jay: Zillow went through a global financial crisis, COVID shutdown down. Reed is a veteran of many crises in his 25 years. As an investor you can say, I’m going to be dispassionately reanalyzing the whole situation. As a CEO leader, you have to be a leader.

I’d say maybe at TCV and other investment firms now, you also have to try to lead and hold hands a little bit because this is generally a young person’s business and that means most investment professionals may not have lived through the global financial crisis. They got here after that. They don’t know whether the world is really going to come to an end or it just seems like it.

David: I think that’s where we would love to end with you and to spend a few minutes off. We got a chance to chat with Howard Marks recently and his son Andrew. Other than Howard, I can’t think of anybody else we’ve talked to who’s had a four decades–long investing career. Here we are at the end of 2022, you’ve seen times like this probably at least 4 times in your career.

Ben: And every one of these downturns is different and idiosyncratic in its own way. Of course, it’s not like oh, this is exactly like it was last time, so it’ll be over in 3½ months. They’re all special, different.

Jay: I’d say there are some that are tech-specific. Internet boom bust. Global financial crisis I describe as a tech got sideswiped a little bit, but didn’t get run over. Current thing after many years of uniformly positive investor psychology. It’s a little bit more front and center, the truck.

David: Got hit by the bus.

Jay: Yeah, but then also, I started during a bear market for small caps. There was the crash of 1987. The markets were crushed in 1990 when it was the first Gulf War. I forget one long-term capital management, when people thought that was the end of the financial system, global financial crisis. The pandemic, there’s no playbook on how to invest during a pandemic. That was a first.

Ben: Then it did the opposite of what we all thought.

Jay: I’m old, but I wasn’t there.

David: During the last pandemic.

Jay: During 1917 or whatever it was.

David: I’m curious especially for the folks in the room who are operating at companies. What advice would you have for, say you’re working at a small cap public tech company right now and your stock’s down 70%?

Jay: I’d say don’t take it personally. By the way, somebody will say it doesn’t mean that XYZ is not going to go down another 70%, because the old joke of stock down 90% is down 70%, down 70%, but it’s short-term. Again, assuming the company’s well-funded. It’s a basic, critical assumption. Just focus on the business. Ignore the press.

Assume that the vast majority of what the press writes is inaccurate. That’s been my experience, stay passionate about the roadmap and delivering value to consumers, and all will be well. It may take three months, it may take two years. I don’t know.

David: I love that point, too. I hadn’t focused on that, but the very beginning of my career was, I started in 2007 after college at the peak and then the global financial crisis. It wasn’t that long.

Jay: It was your fault.

David: Yeah, it was my fault. It was exactly my fault, but it wasn’t that long. It felt like forever at the time.

Jay: I’m not trying to say it doesn’t weigh heavily upon the psyche when it happens. Actually the best business, that’s one of the things you have to guard against. Okay, you seem to be getting beat up every day. It can make you defensive when actually now is the time. Every crisis has been a good period of time to invest. Not across all companies.

Google started in 2000 and people thought it was an insane valuation at 70 pre. That was the chatter. Tesla almost died in 2008 when the auto industry was being bailed out. Just as you look back, there are failures, but it’s proven to be a good period of time.

Ben: Amazon, absent the Joy Covey vehicle of putting together the convert while they were a public company, they would’ve gone out of business.

Jay: You think about Amazon going public in 1996, $190 million in revenues or something like that. The scale is insane. It is hard to separate the negative psychic aspect, but it’s really important, too.

Ben: It’s a great place to leave it.

David: That is a great place to leave it. Well, Jay, thank you so much.

Jay: Thank you.

David: Thank you, TCV.

Ben: Thanks everyone.

The novel digitization of healthcare data and the compelling opportunity for technology

The U.S. healthcare industry is undergoing a rapid technological transformation underpinned by the recent and novel digitization of healthcare data. Historically, the healthcare industry has operated in an offline fashion (e.g., paper records, phone calls, faxes, etc.), and the utilization of digitized healthcare data was largely limited to insurance claims. Today, healthcare generates ~30% of the world’s data and its data volume is projected to grow faster than that of any other industry.[1] At the same time, we believe technology adoption within healthcare remains low compared to other industries.

In our view, the proliferation of healthcare data is principally the result of three factors:

1. Ubiquitous adoption of electronic medical record (EMR) platforms

2. Growing availability of genomic data

3. Increased use of wearable healthcare devices 

The first followed the 2009 HITECH Act, which provided incentives for healthcare providers to purchase EMR technology platforms; accordingly, as of 2019, ~96% of healthcare providers had adopted an EMR, up from only ~8% in 2008.[2] 

The second is a derivative of the dramatic reduction in genomic sequencing costs over the past two decades – from ~$95M per genome in the early 2000s to only ~$500 today.[3] The resultant proliferation of genomic data has had a transformative impact on the medical field and led to a myriad of advances in treatment and MedTech, particularly around understanding how an individual’s DNA contributes to varying health and disease outcomes. 

Finally, the growing use of wearable healthcare devices (e.g., smart watches, blood glucose meters, etc.) has resulted in troves of real-time, patient-generated data that is increasingly being used for real-time patient monitoring and intervention applications, as well as in clinical trials to both expand patient accessibility and improve data capture. 

Until recently, all three of the aforementioned types of healthcare data existed either in an offline format (e.g., paper records) or essentially not at all (e.g., genomic and wearables data). Note that there are several other types of healthcare data consistent with this trend, including, but not limited to, lab, medical imaging, and social determinants of health (SDOH) – all of which are important and have their own idiosyncrasies. In our view, however, drivers #1 – 3 outlined above are the three most notable and encompass the broadest array of healthcare data; accordingly, this piece focuses principally on those three.

As a derivative of unsustainable growth in U.S. healthcare expenditures, coupled with a growing need to improve health outcomes, the healthcare industry has reached a profound inflection point. Against this backdrop, we have strong conviction that numerous category-defining, franchise technology companies will be built that utilize healthcare data to address the industry’s most ambitious problem statements and pain points, including increasing drug discovery and development productivity, improving diagnostic quality and care coordination, driving operational efficiencies, and improving the overall patient experience – all vectors which also improve patient outcomes. In our view, these technology platforms have the opportunity to drive an enormously compelling ROI for industry stakeholders across a myriad of use cases and applications.

Having said all of that, there are several foundational considerations that render healthcare data uniquely difficult to utilize. While the complete list is rather long, here are some of the more notable roadblocks:

1. Healthcare data exists in silos generally organized by data type (e.g., clinical records, insurance claims, genomic, lab, imaging, pharmacy, etc.)

2. Custodians of one type of data are unlikely to be willing to share it with other industry stakeholders (e.g., a provider with clinical data vs. an insurer with claims)

3. There is no ubiquitously utilized enterprise master patient index (EMPI) that can be used to pair datasets at the patient level; single data sources by themselves present an incomplete picture

4. HIPAA compliance and other regulatory considerations heavily restrict data access, sharing, and utilization rights

5. Different data formats and connectivity standards introduce added complexity and friction in terms of data sharing (though some recent industry initiatives are helping)

6. ~80% of healthcare data is unstructured (e.g., free-text notes, images, etc.) rendering it difficult, if not impossible, to use in its current form[4]

In our view, these challenges, coupled with the growing volume and diversity of healthcare data sources, present a unique opportunity for technology companies to deliver significant value to the healthcare industry. We sub-segment the technology companies that benefit from this theme into four buckets, including: 

1. Infrastructure and enabling technologies

2. Data analytics

3. AI / ML to drive decision-making

4. AI- / ML-enabled automation

Note that #1 and #2 are not mutually exclusive, while labeled and annotated training data are prerequisites for #3 and #4. Below we’ve shared a bit more about each category, as well as some representative vendors that fit into each.

1. Infrastructure and enabling technologies – Help connect, normalize, curate, and manage data across disparate sources and formats; examples include 1upHealth, Datavant, Health Gorilla, HiLabs, Innovaccer, Lifebit, Mendel, Ribbon, TetraScience, Tripleblind,, and Veda Data Solutions

2. Data analytics – Packaged, self-service analyses via an application layer and / or curated data delivered via an API; examples include Kipu*, Komodo Health, H1 Insights, OM1, and Truveta

3. AI / ML to drive decision-making – Use labeled / annotated data to train AI and ML models that help end users make better informed, more efficient decisions; examples include Aidoc*, BenchSci*, Deep 6 AI, Diagnostic Robotics, Iterative Scopes, Paige.AI, and Unlearn

4. AI- / ML-enabled automation – Use labeled / annotated data to train AI and ML models that automate business processes and workflows; examples include Syllable*, Abridge, AKASA, DeepScribe, Memora Health, Notable Health, and Robin Healthcare

* TCV portfolio companies

We further believe that technology companies across all four categories have an opportunity to differentiate and establish competitive moats along the four dimensions outlined below. To be clear, compelling technology platforms need not check all four boxes – some may only check one of them.

1. Unique access to healthcare data – This can be a derivative of business model (e.g., open / network-based system), via barter or give-to-get relationships, long-term data sharing partnerships, and / or customers contributing data, among other levers

2. IP that integrates, curates, and prepares the data for downstream use cases – This may take the form of technology tooling and / or organizational know-how (e.g., the process for cleansing the data)

3. Functionality that applies healthcare-specific contextualization – This often involves both platform functionality as well as clinically / scientifically trained personnel in order to ensure effective platform utilization by the end user

4. Software applications that deliver value in the context of specific business use cases and workflows

In closing, the U.S. healthcare industry is perhaps the last major industry to undergo digitization; it is also one of the largest. Against a rapidly growing volume and diversity of healthcare data, coupled with challenges and complexities associated with its use, we believe there is an extraordinary opportunity for technology to play a leading role in audaciously unlocking and delivering value across multiple sub-segments, functions, and applications in healthcare. Accordingly, we at TCV are incredibly excited to continue to partner with companies boldly seeking to utilize healthcare data in order to fundamentally transform both the development of novel medicines and provision of patient care, and, ultimately, to improve patient outcomes.

1 Source: RBC.

2 Source:

3 Source: NHGRI.

4 Source: NCBI.


The views and opinions expressed are those of the speakers and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”). TCV has not verified the accuracy of any statements by the speakers and disclaims any responsibility therefor. This blog post is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by TCV or any of the securities of any company discussed. The TCV portfolio companies identified, if any, are not necessarily representative of all TCV investments, and no assumption should be made that the investments identified were or will be profitable. For a complete list of TCV investments, please visit For additional important disclaimers regarding this blog post, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at

TCV welcomes Patrick Morrison as Head of Portfolio Talent

We at TCV believe that our greatest asset is the collective group of world-class professionals with whom we have had the pleasure and good fortune to work with over our 27 year history as a firm. 

This is a dynamic and constantly growing group of individuals, which includes the founders and management teams of our current and former portfolio companies, current and former employees and operating executives, and a broad set of top experts across multiple areas.

We are pleased to share that Patrick Morrison is joining TCV as Head of Portfolio Talent. In his role, Patrick will have two primary objectives: nurture and expand TCV’s global talent network; and partner with our portfolio companies to reach their strategic hiring, networking, and organizational goals. He will provide the “heat, light, and attention” necessary to build and sustain a deep and highly accessible community of world-class talent and resources. 

Patrick previously worked at Khosla Ventures, where as Vice President of Talent he worked with a portfolio of 300 companies across enterprise, consumer, digital health, sustainability, and frontier. Prior to Khosla, Patrick led executive search for Adobe’s $7 billion Creative Cloud business. He began his career in Talent at preeminent search firms Korn Ferry and Bespoke Partners, where he led CxO searches for public, private equity, and venture capital backed technology companies.

“Fostering and nurturing connections – and access to top-tier talent, specifically – has never been more important,” says Ric Fenton, General Partner and Chief of TCV’s Investment Operations. “With a community of portfolio companies and executive connections across the globe, we’re thrilled to have someone as talented as Patrick aboard to be a thoughtful and strategic ‘connector’ for our network.” 

TCV’s 2022 Promotions: Muz Ashraf and Amol Helekar named General Partners, and more

At TCV, we firmly believe that it’s our people who make the difference, and we are delighted to share nine major firm-wide promotions.

We are excited to announce the promotion of Muz Ashraf and Amol Helekar to General Partners. Both Muz and Amol have played integral roles in accelerating our investments across multiple sectors, including FinTech and technology-enabled services, and have been instrumental in driving growth for many of our portfolio companies.

In addition, we promoted seven professionals across both our investment and operations teams. David Eichler, Mike Kalfayan, Matt Robinson, and David Zhang have been promoted to Investing Partners, and John Delfino, Aaron Ford and Julia Roux have been promoted to Operating Partners. These elevations recognize the vital contributions these individuals have made to TCV’s progress and highlight the high quality and depth of our leadership bench.

General Partner promotions:

Muz Ashraf

Muz is based in London and joined TCV in 2015. He is passionate about investment opportunities in the internet, software, FinTech and technology-enabled services sectors. He serves on the board of directors of Mollie and RELEX Solutions, and his other current investments include Celonis, Klarna, Mambu, Miro, Redis Labs, Spryker and The Pracuj Group. His former investments include Retail Merchant Services (acquired by SaltPay).

Prior to TCV, Muz was an investor with Vector Capital in San Francisco, where he focused on sourcing, evaluating and executing investments across the software, internet and security sectors.

Muz started his career as an investment banker at Merrill Lynch, working with technology companies on strategic M&A transactions and financing activities. He also worked at T. Rowe Price, where he researched technology investment opportunities in Europe. He earned his M.B.A. from Harvard Business School and holds a B.A. in Economics and an M.S. in Management Science & Engineering from Stanford University.

Amol Helekar

Amol, based in New York, joined TCV in 2009 and focuses on investments in the FinTech, software and tech-enabled services sectors. He serves on the board of directors of Clio and Trulioo, and his other current investments include Built, OneSource Virtual, Payoneer (NASDAQ: PAYO) and Razorpay. He was also actively involved with TCV’s investment in AxiomSL.

Prior to TCV, Amol spent several years with McKinsey & Company, advising clients on strategy engagements in the energy, financial services and technology sectors. Amol received his M.B.A. from Harvard Business School and holds a B.A. in Economics from Stanford University.

Partner positions: 

John Delfino

John, based in Menlo Park, California, joined TCV in 2014, and serves as General Counsel overseeing deal structuring, investments and exits, as well as a range of additional legal and operational matters. Prior to joining TCV, John was at Simpson Thacher & Bartlett LLP, advising private equity clients on corporate and securities law services, including mergers and acquisitions, buyouts and fundraising. In addition, John has experience working with private equity and other alternative asset management firms in their formation, fundraising activities and ongoing operations of their investment funds.

John earned a B.A. in Economics and Accounting from the College of the Holy Cross and a J.D./M.B.A. from Santa Clara University.

David Eichler

David, based in Menlo Park, joined TCV in 2013, and focuses on investments in education, HR, FinTech and other software sectors. He serves on the Board of Directors of Perceptyx and his current investments include Built, HireVue, Humu, Nerdy (NYSE: NRDY), Newsela, OneSource Virtual, and Watermark. David’s previous investments include Avalara (NYSE: AVLR), LinkedIn (public investment; acquired by Microsoft) and Tastyworks (acquired by IG Group).

David spent a year away from TCV (2016-2017) working at HireVue in Utah, where he helped develop the company’s sales & marketing strategy. Prior to joining TCV, David was at The Blackstone Group, focusing on technology mergers and acquisitions, and before that he was at Lighthouse Capital Partners. He has an A.B. in Music and Economics from Brown University.

Aaron Ford

Based out of our Menlo Park office, Aaron founded our Data Intelligence Group, which helps TCV make data-driven decisions across the investment lifecycle. He originally joined TCV in 2013 as an investor in the consumer internet sector, where he contributed to TCV’s investments in Airbnb, Dollar Shave Club, GoFundMe, and Rover. Prior to joining TCV, Aaron worked in TMT investment banking at J.P. Morgan. He received his B.A. in Mathematics and Economics from Williams College.

Michael Kalfayan

Mike, based in London, joined TCV in 2014, and focuses on investments in the internet, software and FinTech sectors. His current investments include Believe (Euronext Paris: BLV), FlixMobility, Mambu, Miro, Perfecto, Qonto, Redis, Revolut, Sportradar (NASDAQ: SRAD), SuperVista AG, and Trade Republic.

Mike spent a year away from TCV (2016-2017) working at SiteMinder, where he was Head of Business Operations. Prior to that, Mike was an investor with Summit Partners, where he focused on technology and healthcare sectors. Mike graduated cum laude from Harvard University, where he received an A.B. in Social Studies. He also holds an L.L.B. from the University of Law.

Matt Robinson

Matt, based in New York,  joined TCV in 2011, focusing on healthcare IT and services investment efforts. For the past six years, Matt has helped lead the firm’s IT infrastructure software investment efforts. Matt is actively involved in TCV’s investments in Aviatrix, Devo Technology, HashiCorp (NASDAQ: HCP), OneTrust, Vectra, and Venafi. His prior investments include Cradlepoint (acquired by Ericsson) and Silver Peak (acquired by HPE). Prior to joining TCV, Matt worked at UBS as an analyst in the Global Healthcare Group, advising healthcare clients on a range of transactions spanning M&A, equity and debt offerings. Matt also spent time evaluating healthcare investment opportunities at General Atlantic in New York. Matt received his M.B.A. from Harvard Business School and a B.S. in Biochemistry from Indiana University.

Julia Roux

Based in New York, Julia serves as Head of Investor Relations at TCV. She joined TCV in 2019 to lead the firm’s fundraising and investor relations activities. She brings global fundraising experience in private equity across the technology and emerging markets growth sectors. Prior to TCV, Julia was a Managing Director at Autonomy Capital. She previously worked in private equity at Silver Lake in New York, focusing on global fundraising efforts in Europe, Middle East, and Asia, and was the Head of IR for Vinci Partners based in New York and São Paulo. While at Silver Lake and Vinci Partners, she also supported the deal teams focused on the Brazilian tech sector. She began her career at J.P. Morgan in New York. Julia holds a Master’s degree in Finance from Copenhagen Business School and a Bachelor of Economics from the European Business School, Oestrich-Winkel.

David Zhang

David, based in Menlo Park, California, joined TCV in 2018, focusing on investments in digital media, FinTech and e-commerce. His current investments include Airbnb (NASDAQ: ABNB), Brex, Klarna, Nubank (NYSE: NU), and WealthSimple. David was recognized by Business Insider as one of the Top 25 rising stars in Venture Capital (2019).

Prior to joining TCV, David invested in global internet companies at Dorsal Capital Management and worked in TMT investment banking at Goldman Sachs. David began his career by co-founding an online real estate start-up in Asia. David attended the undergraduate program at the University of Notre Dame and received a B.S. in Economics from the London School of Economics and Political Science.

“We are delighted to announce these promotions, which recognize the great work done to date by our colleagues,” says Jay Hoag, TCV Co-Founder and General Partner.  “Since inception in 1995, TCV has been an active partner to world-leading technology companies, and these professionals embody the core values of our firm and culture we bring to the teams we work with: we expect excellence, and we win, as a team.”

We look forward to their continued contributions for many years to come. Please join us in congratulating our colleagues on their promotions.

The General Partners of TCV


The companies identified above are not necessarily representative of all TCV investments and no assumption should be made that the investments identified were or will be profitable. For a complete list of TCV investments, please visit For additional important disclaimers regarding this post, please see “Informational Purposes Only” in the Terms of Use for TCV’s website.

Consolidated in the Cloud: Darwinbox Delivers End-to-End Talent Management on Demand

Although it’s been over 20 years since McKinsey officially christened the catchphrase “war for talent,” its implications are felt more today than ever before. Global business has become increasingly competitive and borderless, and both the importance and difficulty of attracting and retaining world-class talent has steadily grown. The Covid-induced Great Resignation has now provided the exclamation point needed for companies to wake up to this new reality. 

This massive structural shift has, in turn, escalated the importance of HR teams and shone a spotlight on the tools at their disposal to provide amazing employee experiences from hire-to-retire.

Darwinbox, headquartered in India, has been making waves in this space for many years and we are delighted to welcome them to the TCV family. The company aims to transform HR management and employee engagement via its unique end-to-end cloud-native HR suite. 

Darwinbox’s HCM platform offers both Core HR (the central system of record for employee data) as well as a broad, integrated HR suite spanning the entire employee lifecycle including recruitment, workforce management, employee engagement, performance & talent development, and integrated payroll.

Increasing employee engagement, optimizing performance and productivity, and leveraging technology and data are areas that TCV has been actively investing in. For example, TCV portfolio company Humu’s intelligent technology platform coaches managers and employees into developing work habits that are scientifically proven to drive performance. 

“Investing in technology to find, retain, and engage talent has become inevitable for organizational success,” says Jessica Neal, Venture Partner at TCV. “The pandemic has shown us clearly that we need to support and empower our employees differently, and Darwinbox is on a mission to enable that. I’ve been impressed with their offerings which provide HR leaders with a solution to address the entire employee lifecycle.” 

Challenging the Old Guard

Let’s put Darwinbox’s achievements in context. The mid-market and enterprise HCM landscape in Asia has been dominated by antiquated solutions such as SAP SuccessFactors, Oracle, and, to a lesser extent, Workday for many years. In our view, these platforms were designed decades ago and, owing to their on-prem legacies, have largely failed to innovate. We think they provide rather poor experience for employees and HR teams alike, lack flexibility, have painful & lengthy implementation processes, and are often expensive. 

In contrast, Darwinbox offers a cloud-native, mobile-first offering, architected to be easy to configure and implement even for large and complex organizations. Darwinbox also has deep understanding of the local cultural context ‒ their mobile-optimized offering (optimized to work across a broader range of device and network types) is a prime example of this given the low level of desktop access for employees across industries in some of the emerging markets.

This differentiated approach has enabled Darwinbox to quickly win share in some emerging markets, with 150+ customers already having switched to Darwinbox from SAP, Oracle, or Workday. As a result, it is among the fastest-growing cloud HCM platforms in Asia today, and on track to be the #1 cloud player by scale in Asia within the next two years. 

Putting the Employee First

A key driver of Darwinbox’s success is its design philosophy that puts the employee experience at the heart of every decision the firm makes. The platform replicates the frictionless and highly-optimized user experiences in the workplace that we have become accustomed to in our daily lives, while at the same time preserving enterprise goals on talent management and needs on scalability and security. 

Reflecting this, one of Darwinbox’s north star metrics is user engagement, citing DAU/MAU of 50+% reflecting the value it is providing to its customers (and driving stickiness once the platform has been rolled out across the employee base).

Built from Asia, for the World

Darwinbox, which employs over 500 people today, was co-founded in 2015 by Jayant Paleti, Rohit Chennamaneni, and Chaitanya Peddi who bring deep expertise and collective decades of experience working with HR and digitalization processes from their time working at McKinsey and Ernst & Young. 

While built out of India, the team has taken a very deliberate approach to scaling (e.g. building fully flexible architecture that can be quickly tailored to match local HR workflows) and has always had global ambitions. After several years of operating in India, Darwinbox made its first foray into international expansion in 2019, and began building up its presence in Southeast Asia, a region which exhibited many of the same pain points experienced by customers in India. Since then, Darwinbox has begun expanding into the Middle East and intends to continue expanding its footprint globally, growing an already impressive customer base (1.5M+ users across 650+ companies in over 90 countries).

We, at TCV, are thrilled to be partnering with the entire Darwinbox team on this journey. And, as usual, we’re in it for the long haul.


The views and opinions expressed are those of the speakers and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”). TCV has not verified the accuracy of any statements by the speakers and disclaims any responsibility therefor. This blog post is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by TCV or any of the securities of any company discussed. The TCV portfolio companies identified, if any, are not necessarily representative of all TCV investments, and no assumption should be made that the investments identified were or will be profitable. For a complete list of TCV investments, please visit For additional important disclaimers regarding this interview and blog post, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at