Today, OSS Capital is thrilled to publicly announce our first and second funds with $200M dedicated to commercial open source (COSS) founders building transformative open core startups.
We believe that open source is "eating" software itself much faster than software is eating the world. For greater detail on our investment thesis, please read this tweet thread.
Since launching OSS Capital on October 1st, 2018, we have been building quietly. But from our inception, we have made a build-in-public commitment to expanding the COSS ecosystem. In stewarding our mission, we started Open Core Summit in late 2019, designed and announced our upcoming $COSS ETF in 2020, and created a specific community that continuously generates a ton of content: 120+ hours of video from OCS and 75+ issues of COSS Weekly.
We are dedicated to backing the world's leading early-stage COSS founders via two platforms: Our first $50M debut fund and our second $150M flagship fund. This represents the first time in the tech industry's history that a well-funded platform has focused exclusively on open source founders. We are deeply honored to be entrusted with this privilege.
OSS Capital's Limited Partners represent a unique collection of many of the world's most admired and respected institutional investors and a range of legendary COSS founders and builders.
We are excited to share some of our portfolio data below in service of embracing open source across the board. To our knowledge, this is the first time an emerging VC has exhibited this level of transparency.
Our first fund is now in the management phase. Highlights:
Timing: Deployed over the three years since our launch in October 2018 to October 2021
Portfolio: 38 portfolio investments in total, 50% of which were lead pre-Series-A (seed / pre-seed) investments with meaningful ownership (10-15%) where we often helped the founders incorporate the business on a global basis, and assembled co-investors on the cap table
Investment sizes: ~$100K to $6M, averaging around $1.5M
Geographies (while COSS companies are almost always fully remote and decentralized from day one, these locations are "founder hubs"):
9 teams in the Bay Area (California)
3 teams in Austin
3 teams in NY
6 in India
10 in Europe (London, Switzerland, France, Finland, Germany, Ireland)
2 in Canada
2 in South America (Brazil & Argentina)
3 in China
Promising but early performance data: >5X MOIC & >120% net IRR, not reflecting some in-progress markups.
Our second fund was launched last December 2021 and is in the deployment phase. Highlights:
Allocation: 50% of capital reserved for pro-rata and follow-on investments made in our debut fund, with the other 50% dedicated to expanding our portfolio by another 20~ core investments
Portfolio: 7 investments so far, including two pro-rata and follow-ons from our debut fund + we have co-led two founding unannounced seeds with Sequoia
Similar + more geographic distribution expected 🌍
Investment sizes: We apply what we learned from our first fund and focus on meaningful commitments. OSS II will make new investments only where we are the founding lead / co-lead partner for founders at the earliest stages. We are focused exclusively on seed / pre-seed, and we will not be leading Series A or participating in later-stage rounds for new investments. We will also not be committing to smaller allocations or participating in rounds that we do not lead.
We are also thrilled to share that OSS Capital holds the most extensive portfolio of any VC in the fastest-growing COSS startups globally, mainly as the founding lead investor:
90%+ of Fortune 2000 adoption
20M+ users reached
450,000+ GitHub stargazers
5,000+ open source contributors
15+ projects in the top 0.0001%
90% of the projects behind our investments did not exist 3 years ago
While this all seems like a lot, we are truly just getting started!
Along with my phenomenal co-managing GP and dear friend, Heather Meeker, who has been with us since day one and recently joined our firm full-time in January this year, we are additionally thrilled to share that the exceedingly talented Liana Felt joined us late last year to lead our platform operations function --- it has been a privilege and joy to work with Liana and witness the value and contributions she brings across our portfolio and firm overall.
We are also pleased to have partnered with Nick White, who I worked with at Talend well over a decade ago and was previously the founding CFO of Elastic through their very successful IPO.
Additionally, you may have noticed that we have partnered with the incredibly talented Cassidy Williams, who leads Developer Experience support for our portfolio. Cassidy has been a sheer blast to collaborate with.
We would also like to recognize and thank our advisors for their awesome support: Peer Richelsen, Dave Patterson, Kevin Xu, Kevin Wang, Sam Ramji, Bruce Perens, Jim Walker, Larry Augustin, and many others.
Last but not least, we are committing 1% of our carried interest profits and 1% of our management fees to under-funded and critical Open Source technologies that underpin essential building blocks of the internet. Stay tuned on how we will be systematizing and executing this program.
On the heels of Elon Musk acquiring Twitter and committing to open source it, we couldn’t have dreamt of a better time to make this announcement.
For an open future! 🚀