Wing, an early-stage, Palo Alto, Ca.-based venture firm that was formed in 2013 by veteran VCs Peter Wagner and Gaurav Garg, has closed its third fund with $450 million in capital commitments. That’s substantially larger than the $300 million that the firm raised for its second fund — and it was raised entirely virtually, says Wagner.
What’s so interesting that investors agreed to back Wing through highly uncertain market conditions? A few things, seemingly, beginning with the team itself. Wagner previously spent more than 14 years as a partner with Accel, while Garg was a partner with Sequoia Capital for roughly a dozen years, and institutional investors like that kind of pedigree.
The duo has also slowly been building out their investment team, bringing in a younger partner, Zach Dewitt, in 2017 and more recently recruiting three other investing partners: Sara Choi, formerly of Google; Jake Flomenberg, formerly of Accel; and Aaref Hilaly, formerly of Sequoia.
Wing’s focus on startups that enable the “modern enterprise,” meaning workplaces built on data and powered by AI, is a particularly appealing pitch right now, too, as companies more quickly shift to remote work and cloud-based services.
Indeed, the firm has already seen a three of its portfolio companies acquired, including Aporeto’s $150 million sale to Palo Alto Networks last November, Shape Security’s December acquisition by F5 Networks for $1 billion, and sale of Cumulus Networks to Nvidia just last month, for undisclosed terms.
The icing on the cake, presumably: Wing is also a seed investor in Snowflake Computing and has participated in every round that the company has conducted since. Considering that Snowflake was valued at $12.4 billion when it closed a massive round of funding in February, that bet has to have Wing’s investors excited, especially with an IPO imminent. (Snowflake CEO Frank Slootman has suggested the company’s next financing event will be a public one.)
We talked with Wagner earlier today about raising the fund during lockdown conditions, an experience he called “interesting” but that, luckily for the firm, mostly meant talking with representatives from the university endowments, family offices, and fund of funds that were already backers of the firm. Though the firm has a handful of new backers, he added, it had gotten to know four of them in recent years, leaving just one whose relationship with the firm came together entirely over Zoom and other collaborative tools.
We asked whether Wing has made any investments of its own while the U.S. has largely sheltered in place.
He said of four deals in the pipeline currently — two for its last fund and its first two deals for its third fund — it has backed just one founder who it hasn’t yet met in person. “You have to be very intentional, really exercise your listening skills, and communicate very clearly,” said Wagner of the process, adding that: “If a founder is coming from a network of people where you have a lot of relationships, that can add some level [of comfort], too.”
Given the renewed focus on diversity in Silicon Valley, both within the ranks of venture funds and within the funds’ respective portfolios, we also asked Wagner if Wing has backed any founders of color.
The firm — which writes checks as small as $200,000, has the flexibility to pour more than $20 million into a single startup, and only moves forward when the partnership votes unanimously to do so — has just one related seed investment in a genomics company focused on post-traumatic stress disorder, he said.
“We can do better,” acknowledged Wagner, who has separately joined dozens of other VCs in pledging to host “open office hours” for between one and four hours each week in an effort to form more relationships with students and founders of color.
“There are other things to be done, and frankly, we’re open to good ideas.”