TCV welcomes Patrick Morrison as Head of Portfolio Talent

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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.” 

Safeguarding the modern software supply chain: Legit Security

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Software development is a $2 trillion industry – yet today’s “software supply chains” have become increasingly challenging to govern and secure as agile development practices have evolved in the modern cloud era. Legit Security, a recent addition to TCV’s portfolio family, is on a mission to change that by providing end-to-end governance and security throughout the entirety of the software development lifecycle. 

Software now plays an important role in nearly every business; it is one of the most critical assets empowering organizations to create efficiencies and competitive differentiation. Software development practices are constantly evolving to improve business agility and enable new digital business models, but as a result, software supply chains are also changing, have become highly complex, and are increasingly difficult to govern and secure. Too often, the code, pipelines, development infrastructure, and third party resources within the software development lifecycle (SDLC) are left insecure, exposing the organization to potential breaches and software supply-chain attacks. 

The damage inflicted by software supply-chain attacks has gained publicity following events such as log4j and Solarwinds. However, these attacks were not isolated, and it’s estimated that software supply chain attacks are increasing at a rate of two to six times per year. As a result, the importance of bringing security and governance to the entirety of the software supply chain is becoming top of mind for businesses globally. 

Introducing Legit Security: Security for software supply chain environments

Legit Security, an Israeli-based security company founded in August 2020, aims to address this acute pain point by providing a security platform that protects the pipelines, infrastructure, code, and people within software supply chains so that businesses can stay safe while releasing software quickly. The platform provides security and developer teams with a “single pane of glass” to secure the SDLC by scanning development pipelines for gaps and leaks, the SDLC infrastructure and systems within those pipelines, and the people and their security hygiene as they operate within it.

Legit Security’s platform aims to remove blind spots and automate governance and compliance for the software supply chain. The platform uses an automated discovery and analysis engine to identify vulnerabilities, measure and track the security posture of teams and development pipelines, and ensure compliance to regulatory and governance frameworks in real-time. By using Legit Security, security and development teams can manage risk more effectively and increase efficiency by focusing on what’s most important.

“Legit provides a single pane of glass to mitigate software development risk. We’re now able to inventory all our SDLC systems and security tools, view developer activity, and detect and remediate vulnerabilities across them fast. Legit’s security scoring also allows me to measure the security posture of different teams and show progress improving it.” – Bob Durfee, Head of DevSecOps at Takeda Pharmaceutical Company

Deep cyber security expertise 

TCV is investing in Legit Security through its recently-announced Velocity Fund, which aims to invest in expansion-stage companies in its sectors of interest.

The founders and executive team of Legit Security have deep experience in cybersecurity. The founders all came from Checkmarx, a leading application security testing business, and had initially met in the Israeli military’s intelligence unit. As cybersecurity researchers and team leads for the renowned Israeli Defense Force’s Unit 8200, they gained real-world security experience with the offensive and defensive tactics specific to software delivery pipelines.

CEO & Co-Founder Roni Fuchs was formerly Senior Director and Head of Software Composition Analysis at Checkmarx, after his previous startup Lumobit was acquired by Checkmarx less than a year after its launch in 2018. Previously, Roni was a senior software engineer at Microsoft. Liav Caspi, CTO & Co-Founder of Legit Security, and Lior Barak, the company’s VP of R&D and Co-Founder, share similar backgrounds: all three overlapped at the Israeli military, Lumbobit, and Checkmarx. Chris Hoff, VP for Worldwide Sales was most recently Regional VP of Sales at Duo Security, having previously held sales roles at EMC, Kaspersky, Cognos, Watchfire/IBM, and CA Technologies. Derick Townsend, VP of Marketing, was most recently VP of Product Marketing at Ping Identity, with prior marketing leadership roles at UnboundID, DXC, ServiceMesh, CA Technologies, iTKO, and IBM.  

Shifting left: The vast “DevSecOps” opportunity

So why are we so excited? Well, on top of the deeply relevant and honed skills that run through the company from its highest level, we believe that Legit Security is on to something big and important in the application security space. Over the past five years, as application development practices have evolved, the notion of “DevSecOps” (development, security, and operations) or “shifting left” has become increasingly popular. 

“Shifting left” aims to make security more agile, repeatable, and automated, ultimately empowering DevOps teams to bring products to market faster. Existing application security solutions generally operate in isolation, resulting in silos throughout the pipeline. Further, blindspots can exist along development pipelines and SDLC systems and infrastructure, including GitHub / GitLab repos, which are not covered by traditional application security tools. In addition, the disparate nature of traditional AppSec tooling requires security teams to navigate across the numerous point solutions to try and stitch together insights into potential vulnerabilities, often leading to “alert fatigue.” 

Legit Security bridges this gap by spanning the SDLC with automated discovery and analysis capabilities that include auto-detection of code repositories, build servers, artifact repositories, and deployed security products such as Snyk and Veracode along with their security coverage. When your SDLC changes, it’s automatically detected by Legit. The platform provides hundreds of best practice software supply chain security policies that can be enforced directly in the product, as well as a unique Legit Security Score to manage risk, track security posture, and monitor compliance to regulatory and governance frameworks in real-time.

This holistic, end-to-end insight enhances governance at various checkpoints, empowering enterprises to derive greater value from existing security tools. It’s no coincidence that customers frequently describe the Legit Security Platform as their “application security command center.”

Where are we now?

Legit Security has now emerged from its pre-launch phase, during which the company has been busy acquiring customers (from Fortune 500 companies to fast moving software-driven businesses), building a platform for demanding enterprise environments, and securing funding from top-tier investors, including TCV. The business has already grown significantly with new offices in the U.S. and Israel, and an expanded team, as well as connections with important partners and advisors.

I’ve known co-founders Liav and Lior for many years, since our time working for the Israeli Defense Forces. We gained invaluable experience there, but perhaps most important was learning that ‘anything is possible’ in cybersecurity with the right talent, focus, and resources.”

Roni Fuchs, CEO & Co-Founder, Legit Security

After military service, the founding team members worked in leading cyber security companies across Israel and recognized a growing gap between traditional AppSec tools and a new generation of rapidly evolving, modern software development environments. The gap was growing and traditional security tools and vendors were unable to catch up.

“Because of the adoption of agile development, cloud, and modern development pipelines, the approach needed to secure software releases has fundamentally changed. It’s no longer just about ‘the code’. Software is now assembled in multiple steps across a supply chain leveraging many trusted contributors, pulling artifacts from countless repositories, built, and assembled on underlying infrastructure that must be securely configured, and all the while providing speed, agility, and efficiency. These modern supply chain environments created a sprawling new attack surface – one that is increasingly exploited by over 2x-6x a year, depending upon the analyst, government agency, or vendor report you read.” – Roni Fuchs, CEO & Co-Founder, Legit Security

TCV team members Matt Brennan (TCV General Partner), Tim McAdam (TCV General Partner), Mark Smith (TCV Venture Partner), and Alex Gorgoni (Investor) are excited to partner with Legit Security, helping to guide the company through its next critical phase of growth. Our team has witnessed first-hand the enthusiastic response of customers as they learn about the unique positioning and scope of the Legit Security platform, and its ease of deployment.

This is a sector we expect to be active in over the coming months, too, and we look forward to being a part of it. 

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The views and opinions expressed are those of the author and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”). TCV has not verified the accuracy of any of the data or statements by the author 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 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 www.tcv.com/all-companies/. 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 http://www.tcv.com/terms-of-use/.

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

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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

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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 http://www.tcv.com/portfolio-list/. For additional important disclaimers regarding this post, please see “Informational Purposes Only” in the Terms of Use for TCV’s website.

Making Work Better: Humu Applies Behavioral Science and AI to Optimize Employee and Enterprise Performance

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As the world shifts towards a knowledge economy, enterprises need to re-imagine how they do business. They are realizing that their employees are their most important asset and are searching for a smarter way to engage, encourage, and drive the best performance. Enter Humu, a platform working at the intersection of behavioral science and AI to solve that very issue.

Humu, a recent addition to the TCV portfolio, is rapidly gaining adoption from some of the world’s largest and most complex organizations. Its intelligent technology platform coaches managers and employees into developing work habits that are scientifically proven to drive performance. Humu was co-founded by CEO Laszlo Bock, former Google SVP of People Operations, and is the output of decades of his work and experience in helping make HR a more data-driven function. Laszlo is uniquely positioned to build the Humu technology platform into a must-have for organizations looking to drive employee engagement, optimize performance, and improve productivity.

Specifically, by nudging employees with short, behavioral science-backed recommendations, Humu provides personalized guidance that’s unique to each employee, helping workers to build better habits, while also driving towards organizational goals, including employee retention, manager effectiveness, productivity, and inclusive cultures.

TCV is thrilled to lead Humu’s $60 million Series C. The investment, which follows two years of significant growth for the Company, will fuel new product innovations geared to support managers and their teams. TCV venture partner Jessica Neal, former Chief Talent Officer at Netflix, has joined Humu’s Board of Directors as part of our new partnership.

TCV’s experience in seeing the magic in the Right Content, Right Person, Right Time

TCV has long understood the value of delivering engaging, timely content to the right person at the right time and has invested based on this thesis for over two decades, including in companies like Netflix (video), Spotify (music), Peloton (fitness), and Newsela (K-12 instructional content).

TCV believes that timely content curation and delivery should extend from our consumer lives to our work lives: if Netflix can feed us more of what we need to keep us entertained, why wouldn’t we benefit from similar capabilities in the workplace? Businesses need a system that serves us the right content at the right time to help us perform better.

What is exciting about Humu? Humu is driving real outcomes

Humu’s AI-based Nudge Engine™ technology drives timely “nudges” to encourage employees to do more of what creates optimal outcomes and experiences for employees and enterprises. Nudges are delivered in curated pathways that are algorithmically generated, sequenced, and tailored to a particular initiative and employee.

At a glance:

  • Every Humu nudge is based on academic research and carefully crafted by Humu “people analytics” experts
  • User experience panels ensure nudges are easy to understand and act on. Feedback loops make it possible to turn off what’s not working, and send more of what is
  • Employees turn to nudges more and more over time. Sustained nudge engagement rates across customers are as high as 95%

At Silicon Valley Bank, Humu’s nudges focus managers and employees on what matters most – and remind them at just the right moments to adjust their habits. That could be in supporting managers who may be too focused on execution at the cost of supporting employee development and encouraging them to find ways to offer their people personalized growth opportunities. Don’t take our word for it…hear it directly from Humu’s customer SVB:

“People don’t have to wait for management to roll out a time-intensive program. Humu provides our employees with relevant, customized feedback that’s not generic or mundane. Nudges democratize the employee engagement process; they make learning much timelier and easier for everyone involved. We have a 70% open rate, which means it’s going really well. The right nudge at the right time really makes all the difference.”

Chris Edmonds-Waters, Chief Human Resources Officer at Silicon Valley Bank

A team that helped build a trillion-dollar business, and is now on a mission to solve work for everyone

Humu’s CEO Laszlo Bock helped build and lead Google’s people function for ten years, a role in which he was responsible for attracting, developing, retaining, and delighting ‘Googlers’ (he distilled a lot of his practices and insights into his book published in 2015, Work Rules!: Insights from Inside Google That Will Transform How You Live and Lead).

He co-founded Humu in 2017 with former Google colleagues Wayne Crosby (former Director of Engineering) and Dr. Jessie Wisdom (former People Analytics Manager). Together, this formidable team founded Humu “to make work better through machine learning, science, and a little bit of love” – not to mention everything they had learned about smart use of data.

“When we began this journey in 2017, we knew our experience in pioneering the field of people analytics would help us build what we believe is the best technology for supporting managers and employees, and we’re proud of the impact we’ve made.

This latest investment, led by TCV, signals our partners’ confidence in our ability to deliver on that promise long into the future, and we’re excited for what we’ll bring to the market, especially for managers, in the months to come.”

Laszlo Bock, CEO of Humu

TCV is excited to be a partner in building a category leader

TCV believes Humu represents an opportunity to back an emerging leader in the HR technology sector, led by a world-class team that’s uniquely positioned to penetrate a massive market with compelling industry growth tailwinds. With this latest round of funding, Humu aims to take steps towards executing its bold vision of facilitating building a unique, high-performing culture for its client organizations based on proven best practices. As a firm that focuses on long-term value creation, TCV believes that Humu, with its deep background in people analytics, has the potential to make a positive impact on the way we all work.

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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 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 www.tcv.com/all-companies/. 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 http://www.tcv.com/terms-of-use/.

Introducing Velocity – TCV’s New Fund Targets Expansion-Stage Investments, Raises $460 Million

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Menlo Park, New York, January 31, 2022 – We are delighted to start 2022 with the announcement of Velocity, a $460 million fund geared towards expansion-stage investment opportunities. After a momentous year in 2021 – resulting in 14 public listings, which include IPOs, direct listings, and SPAC transactions – TCV believes that Velocity will allow us to continue the firm’s history of partnering with leading companies from early investment rounds through IPO. We believe that Velocity is ideally placed to take advantage of a growing investment segment and will complement our parallel investment activity with ambitious tech companies at later stages of development.

Apply the insights of proven companies to ambitious growth companies

Velocity builds on our long history of success backing category leaders and is specifically designed to help founders of innovative companies as they shift from product-market fit to scaling up. With a dedicated team of investors, Velocity will draw on the resources and reach of the entire TCV platform to help ambitious expansion-stage companies achieve the next phase of growth.

TCV’s investment approach since day one has been our willingness to invest and reinvest through thick and thin, and across the company growth lifecycle, from early-stage funding to IPO and beyond. It also has been our steadfast belief that the strongest investment partners provide something far more valuable than assets alone. Since inception in 1995, TCV has backed category leaders across both B2B and B2C tech markets, executing 79 public listings and 69 M&As as of the end of 2021. 

The firm has $28 billion of assets under management as of September 30, 2021. We believe our high profile and strong performance are due to our thematic approach (including fintech, education, prop-tech media/entertainment, e-commerce, healthcare, vertical SaaS, and DevOps security); our success in identifying future category leaders; our end-to-end operating support/rolled-up-sleeves approach; and our patient investment style. We work with entrepreneurs over the long term as their capital partner and believe that we can support them with acquisition capital as well as secondary funding to IPO anchoring, post-IPO support, and beyond.

About Velocity

The Velocity fund is already off to a promising start with several portfolio investments, including BenchSci, a global leader in machine learning applications for novel medicine development, and Passport, a modern international shipping carrier built for e-commerce DTC brands and marketplaces. Our aim is for a concentrated portfolio with access to the full TCV platform across investments of Series A, B, C, and beyond. 

TCV Velocity features a dedicated team of investors and operators. It is headed by General Partners Matt Brennan and Gautam Gupta, who together bring a powerful blend of operating and investing experience. The Velocity investment team also includes three additional investors who have joined TCV in the past year from other leading venture growth firms.

Velocity investment themes

Although this list is by no means exhaustive, the Velocity team will be keeping a close eye on opportunities linked to the following high-growth sectors, which are already proven success themes for TCV:

  • E-commerce enablement
  • Tech disruption across health & wellness
  •  Democratization of financial services
  • Acceleration of AI/ML adoption
  • Supply chain digitization and optimization

Strategically timed for success

We believe the timing of our new Velocity fund has been well planned. With technology companies scaling faster and looking to expand earlier, we see what we believe to be a perfect opportunity to leverage our established platform to address the unique growth needs of younger/earlier-stage companies.

The Velocity fund intends to partner with TCV’s Growth funds to provide full lifecycle capital, generally from Series A through IPO. With Velocity, we’ll be taking our deep insights into what we believe makes a great company and applying them much earlier. TCV’s goal is to allow CEOs to think longer term and introduce them to TCV as a capital partner for the next decade, across all stages of their lifecycle, pre- and post-IPO.

A differentiated multi-stage investor

TCV’s “long view” and crossover approach, for which we are well known, is linked to our flexible approach that we intend, in turn, to tailor to the particular needs of each company and its early investors. TCV can lead or follow and has no minimum ownership requirements.

As well as investing across the lifecycle of a company, with both the Velocity fund and our Growth fund, our interests are no longer confined to a particular investment bracket: we generally write checks from $10M to $400M+. As such, TCV can support companies across a variety of requirements – from acquisition capital and secondary funding to IPO anchoring, post-IPO support, and beyond.

There are all kinds of new tech innovators out there that we believe are ideally placed to help; and in 2022, we look forward to joining them on their scale-up journey.

“TCV is using its vast experience of taking companies to IPO and beyond to help expansion-stage companies with equivalent ambitions. We’re enormously excited about the year ahead, as we formally bring to market this much anticipated new fund and engage with founders of companies that are rich with potential and aggressive ambition.”

– Matt Brennan, General Partner, TCV

“As our current portfolio CEOs will attest, we’re already active investors that partner with founders over the lifecycle of the company – from as early as a Series A all the way through an IPO and beyond. We have a 27-year track record of scaling what we believe to be iconic franchise companies (the likes of Airbnb, Alarm.com, EA, Netflix, Peloton, Spotify, and Zillow) and in many cases, we remain involved for the long term, seeing companies through multiple economic cycles.”

– Gautam Gupta, General Partner, TCV

“For more than a quarter of a century, TCV has invested in over 350 companies, including category leaders like Airbnb, EA, ExactTarget, Netflix, Spotify, Facebook, Alarm.com, Splunk, and Zillow. The experience of helping the founders of these companies scale their businesses into dominant public companies has given us the pattern recognition to help emerging companies earlier in their development cycle lay the foundation on the path to becoming future franchise names in the tech world. Our goal with the Velocity fund is to identify and support the next generation of category leaders on this journey.”

– Tim McAdam, General Partner, TCV

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About TCV

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 www.tcv.com/all-companies/. For additional important disclaimers regarding this blog post, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/.

Understanding the Future of High Tech

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If the best way to create the future is to build it, then the best way to understand a possible future is to listen to those who invest in it. Gartner interviewed several leaders at TCV to better understand their views on the future of high technology and high-tech providers. The views expressed below represent TCV’s view on its operations and the future. These opinions are TCV’s own and independent of Gartner positions. Throughout the interviews, the following themes emerged regarding the forces and factors driving technology investments and future success:

  • Top-line revenue growth has replaced cost efficiency as the primary job for technology — it is now Job. 1.
  • Insight is the source of effective strategies for achieving growth through differentiation and specialization.
  • The pace of change is accelerating across the frontiers of technology, including how rapidly companies and consumers adopt it — and few competitive advantages are as decisive as speed.
  • Technology architectures are in the midst of a generational change that is driven by more than the cloud or Hyperscalers.

TCV has invested in these insights, focusing on companies with the technological potential to support rapid, substantial growth in large, untapped markets. Figure 1 shows the ideas and connections TCV leaders described as the future of high tech.

Figure 1. TCV’s Perspective on Technology-Accelerated Growth

Growth Is Job 1 for Technology

“When you cut through all of the jargon and acronyms, the biggest difference for software and tech over the past five years has been in supporting growth,” says McAdam, who contrasts the growth imperative with technology’s prior jobs of taking costs out or getting cheaper computing power. 

“Technology has created operating leverage via business process automation. Now technology’s value rests in driving top-line growth.” This changes the nature of technology, how it is valued, and what it does, according to McAdam.

“Growth is the uber premise when we think about disruptive technology solutions and the digitization of everything that drives our investment themes,” McAdam explains. “Consider CFOs. It used to be that an old-school CFO would be cost-oriented and say yes if the solution saved money and drove EPS. CFOs of today still care about this, but not as much as they care about taking market share from the competition. The clearest way a tech company can get a multibillion-dollar market cap — one that is 10, 20, 30 times revenue, is to provide a product that allows customers to transform their businesses and grow faster than the competition.”

Building for Scale and Speed

Applying technology in support of revenue growth requires TCV to work with companies on their go-to-market (GTM) strategy. TCV uses the ratio of revenue growth to sales and marketing expense (see Figure 2a) to identify points of friction and efficiency.

Figure 2. TCV’s Sales and Marketing Ratio

The calculation indicates how much new growth the company is achieving for every dollar spent on sales and marketing. If the ratio is 50 cents every $1 spent on sales and marketing generates 50 cents in new growth. The lower the ratio, the more opportunity there is to increase efficiency or effectiveness.

Figure 3 illustrates how the sales and marketing ratio can visually depict the performance of a company’s sales and marketing efforts. (Note these ranges are for illustration only; typical ratios vary by industry.)

Figure 3. Illustrations of Sales to Marketing Ratio

Source: TCV

TCV is using technology in a number of ways to move the needle:

  • Implementing analytics and diagnostics to identify growth obstacles, and documented strategies to better orchestrate key GTM practices across sales and marketing.
  • Facilitating forums and collaboration where leaders share ideas and best practices and road-test ideas with other executives.
  • Leveraging GTM practices that are based on best practices within the portfolio and providing other TCV companies with ready-to-programs to speed time to value.

TCV’s head of Marketing, Katja Gagen, added: “We see companies using technology to optimize their go-to-market capabilities. This can range from publishing thought leadership on growing sales pipeline or refining their messaging. The difference with technology is that companies can actively benchmark themselves against industry best practices.”

Blending Human Insight with Analytics to Identify Growth Potential

“We track nearly 10 million companies in our database,” notes Tim McAdam, a general partner at TCV. “We then do a deeper analysis of 2,000 to 3,000 candidates per year in order to select 12 to 15 companies in which to invest.” This puts our information on prospective companies into an analytic engine running proprietary algorithms created from the firm’s domain knowledge, sector expertise and 26 years of investment insights.

The result for each candidate is much like a credit score — a snapshot of investment worthiness that guides subsequent analysis and decision making. As McAdam explains, “Any given result is statistically valid because of the high number of other companies we have ranked against the same set of metrics. It’s an empirically driven assessment of the company’s areas of strength and needs for improvement.”

TCV uses this information to differentiate each of its portfolio company’s situation and connect it with experienced people and resources in support of the company’s success. McAdam compares TCV’s role to that of a coach, “we recognize that the founders of our portfolio companies are deeply invested in their firms. We seek to provide advice for them with humility, intellectual honesty and insight, with an eye toward finding solutions that move them forward.”

Growth requires a different Technology Architecture and Infrastructure

Matt Robinson, a TCV principal, explains that “high-tech architectures shift about every decade. Today, the increasing importance of speed, extensible solutions and consumption-based business models is the driver of evolution in architectures and infrastructure. If my technology is designed to drive your top-line growth, then your growth becomes my growth,” Robinson explains. “Our architectures and infrastructures need to be seamlessly integrated together.” Thus, the business case for architecture evolution is at least as important as the technical innovation from cloud and Hyperscalers.

The Future of High Tech — High Growth Potential

TCV does not see the future as one of consolidation around a few large well-capitalized companies — either Hyperscalers or so-called digital giants. “It is an old argument to think that everything will consolidate,” McAdam notes. “That view makes sense only if companies stop finding new ways to grow.” While he believes that Hyperscalers are important, he sees their role as “more of a channel to a stream of future technology-intensive growth and innovation rather than a competitor in the application/solution space.”

Gartner subscribers can see the full published case study at: Case Study: The Future of High Tech and Generative Providers (TCV).

TCV Welcomes Edie Ashton as Chief Information Officer

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Over the past 26 years, we have grown our portfolio companies and our own team to a point where TCV is operating across three offices in the U.S. and Europe. Due to the scale and global reach of our organization, we are excited to expand TCV’s executive talent to take us to the next level.

As such, we are thrilled to announce that Edie Ashton is joining the firm as Chief Information Officer (CIO). Edie was previously at The Carlyle Group, where she spent nine years, most recently serving as segment CIO for Global Private Equity. Adding Edie to our leadership team is a critical piece of our growth trajectory and demonstrates our ongoing commitment to deploy modern technology in support of our data-centric culture.

Edie comes to TCV with deep experience in both financial services and data strategy. As CIO, she will help advance growth by focusing on talent excellence, agility, and innovation in areas such as applied AI and distributed infrastructure—bringing a deeper alignment of IT and TCV’s core business as we pursue seamless global collaboration and acceleration of our investment platform.

Edie started her career at the Capital Group and Jefferies & Company, before enjoying a decade-long run in the telecom industry, implementing data warehouses and analytics platforms at global brands such as Nextel, Sprint, and RCN. At Carlyle, Edie proved herself a versatile business-oriented technologist who introduced the first data governance program and established a diversity and inclusion plan for the IT division.

“Edie is joining TCV at the right time,” says Nathan Sanders, General Partner and Chief Operating Officer at TCV. “We are experiencing significant growth and expansion of our team globally and have seen the benefits of leveraging sophisticated IT technology across our portfolio and TCV. Edie is a proven IT leader and tech visionary, focused on results that advance the whole organization. We are thrilled to welcome her to the TCV family.”

TCV Welcomes Jessica Neal as Venture Partner

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We are delighted to share that Jessica Neal has joined TCV as a Venture Partner. Jessica will be working with investment teams on new opportunities, while also assisting our portfolio companies as they scale. A highly experienced operational leader with a track record of building teams and high-performance cultures in growth companies, we believe Jessica is going to make an immediate impact. She was most recently Chief Talent Officer at Netflix, where she spent over 11 years during two tours of duty.

Jessica was a key part of a management team that were pioneers of their industry. She was responsible for building and managing a talent organization that is widely recognized as best in class. Jessica also has relevant experience in other areas of technology. She served as both Chief People Officer for Scopely in the gaming space and as Head of People for Coursera, a disrupter in Online Education. Jessica currently serves on the board of directors of software company JFrog.

Her achievements are many. Jessica has been recognized on the N2Growth and Stanford Graduate School of Business 2020 Leaders25 Top CHRO List. That same year, she was listed in PeopleGoals’ “Top 10 HR leaders to follow.”

Jessica’s differentiated set of experiences working with growth companies, together with her deep operational knowledge, position her well to advise founders and management teams on building their business. We believe she is a Master of Scale.

Please join us in welcoming her to the TCV family.

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The views and opinions expressed are those of the authors 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 www.tcv.com/all-companies/. For additional important disclaimers regarding this blog post, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at www.tcv.com/terms-of-use/.