'Queen' exits venture firm to establish own fund

[SAN FRANCISCO] The "Queen of the Internet" will soon have her own investment firm.

Mary Meeker, a venture capitalist at Kleiner Perkins, plans to depart the firm this year to start a new investment fund. It is a significant loss for Kleiner, which hired Ms Meeker, a former Wall Street analyst known as the Queen of the Internet for her bullish coverage of internet stocks, in 2010.

Ms Meeker is leaving as Kleiner as the storied venture firm has been shrinking. It plans to spin off its practice of investing in more mature and larger private companies, known as late-stage investing, into a separate entity.

Three other investors at Kleiner - Mood Rowghani, Noah Knauf and Juliet de Baubigny - will join the new firm with Ms Meeker, which has not yet settled on a name, she said in an interview.

Ms Meeker, 58, made her name in the late 1990s as an analyst at Morgan Stanley, cheerleading risky dot-com stocks even through the 2000 market crash. Since joining Kleiner, she has led its investments in more mature startups and yielded several successful bets by putting money into Facebook, Twitter, Spotify and Snap when the companies were further along. She also delivers an annual internet trends report that is often regarded as required reading in the technology industry.

Her exit is the latest shake-up at Kleiner, a 46-year-old firm that helped put venture capital on the map and in its heyday nurtured companies including Netscape, Sun Microsystems, Google and Amazon.

In recent years, the firm has struggled to produce the same successes. After the dot-com bust, Kleiner missed the initial wave of social networking startups and focused on putting money into technologies that would help the environment, in what turned into a costly detour. Over time, other venture firms have risen and garnered more buzz.

In 2016, Kleiner wound down an investing program called Edge, which was designed to put money into very young startups. Several venture capitalists have left the firm, with John Doerr, the firm's longtime leader, stepping back from day-to-day responsibilities in 2016. Last year, Kleiner also spun off its clean-tech investment arm into a separate entity called G2VP.

Kleiner's image also was battered by a gender discrimination suit brought by one of its former investors, Ellen Pao, and a 2015 trial on the matter. The firm won the suit, but Ms Pao's allegations and treatment in the trial received renewed attention last year with the publication of "Reset", her tell-all book about her experience.

With the new firm, Ms Meeker said, she and her partners plan to invest in mature technology startups, with the potential to seek more deals outside the United States. The split affords her and her partners more flexibility and focus, she added.

"We believe focus, focus, focus, nimbleness and specialisation will help us," she said.

She and her partners will also continue to invest money from Kleiner's KPCB Digital Growth Fund III, a US$1 billion vehicle, Kleiner said. More than half of the money in the fund has been deployed into startups.

Ted Schlein, a longtime partner at Kleiner, will lead the firm's investment practice, alongside Mamoon Hamid, who joined from another venture firm, Social Capital, last year. Other partners include Eric Feng and Wen Hsieh.

Mr Schlein said changes to the investment landscape, including the influx of capital into private technology startups, were a factor in spinning out the practice of investing in older startups. He said Kleiner would focus on putting money into startups that were more nascent.

"We would much rather be far more specialised and win, and dominate those sectors we are focused on," he said.

The firm is attempting to stabilise with a new generation of investors before raising capital for its next fund. In addition to hiring Hamid, known for backing Slack, Box and Yammer, the firm recently brought on Ilya Fushman, a former investor at Index Ventures.

NYTIMES