Reddit Co-Founder Alexis Ohanian’s 776 Closes New $500 Million Venture Fund – Techdoxx

Deepak Gupta
Deepak Gupta February 1, 2022
Updated 2022/02/01 at 10:28 PM

seven seven sixbetter known as 776, announced today that it closed $500 million on two vehicles for its second fund.

The increase was “excessive,” with $300 million earmarked for funding startups in their “earliest possible” stage and $200 million allocated to support companies in their growth stages — or when they start to emerge, according to the report. 776 founder Alexis Ohanian.

Notably, the 776 only closed on its first $150 million – also oversubscribed – background just a year ago. She now has $750 million in assets under management.

We saw significant margins from our initial investments in Fund I and ended up needing to raise this second fund sooner than expected,” Ohanian told Ploonge in an email interview. “Good troubles to have!”

Today, the 776 portfolio includes more than 38 companies that have cumulatively raised more than $800 million in subsequent capital. Interestingly, the company “almost always” leads the rounds in which it participates, according to Ohanian.

776 portfolio companies include Alt, an alternative asset trading platform; Pipe, a global trading platform that makes recurring revenue streams tradable at their annual value; Axie Infinity, a universe of online play-to-win games on Web3 that has witnessed over 200x growth in the past year and Metafy, a video game education platform that provides one-on-one access to champion-level game trainers. Pipe was valued at $2 billion at the time of its latest raise and Axie Infinity at $3 billion last October.

Ohanian, who also co-founded Reddit and Initialized Capital, told the Wall Street Journal that 776 plans to invest “primarily in cryptocurrency startups” from its new fund and that 40% of its current portfolio is comprised of crypto-related companies. Cryptocurrency investments are already off to a good start to 2022, adding to the record hype in 2021.

When asked to confirm his focus on cryptocurrencies, Ohanian told Ploonge that 776 follows “the lead of the smartest founders we know.”

So if they keep developing on Web3, we’ll keep funding them,” said Ohanian. “We are also seeing a strong push in weather technology, space technology, food technology and still good old-fashioned SaaS business.”

As for how 776 gets its business, the investor said that, for now, it’s a “very old-fashioned” process in which leads mostly arrive via email or text and end up on Cerebro, the operating system developed by his company.

That will improve this year with a few more products to widen our top of the funnel,” said Ohanian.

Cerebro is their first product and is designed to give founders a way to search the 776’s network of 44,000 contracts and request a “one-click” introduction.

The thinking behind the technology was simple.

“We have a big network that bounces back our emails and it’s not a good job for a human brain to be asked ‘hey, do you know anyone on twitter? Do you know a machine learning engineer?’ Ohanian said. “It’s much better to query a database whenever you want.”

All the work for the 776 is there and that too is planned, he said.

“This creates transparency and accountability – not just within our team, but also with our founders and investors,” Ohanian told Ploonge. “The goal is to scale first the most valuable and most productive parts of our work, so that when we spend time with our founders, it’s the kind of work that only humans can do well (empathy, strategy, creativity).”

In launching the first 776 fund, the company explicitly said that sought a diverse base of investors, of whom 50% identified as women and 15% as black or indigenous.

So how’s it going?

The firm invites all its LPs to participate in a biannual event, in-depth demographic survey. The most recent survey revealed that 51% of the 776 LPs identify as female, 13% as black or indigenous, and 10% as Latino/a/e.

It has no explicit founder diversity goals.

To improve its game on being a resource for founders, Ohanian said the 776 began providing “real receipts,” or monthly accountability reviewsfor the work it does for its founders.

“It’s our engine exhaust,” he said.

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