August 19, 2022

The road from rejection to Fund V

Today, I am so excited to announce the successful completion and launch of our Fund V of $110 million, our very first fund to cross the 100 million mark! Our efforts and achievements over the past eight years have served to win us the validation and investment of world-class institutional investors along with family offices – as of now, Cherubic Ventures has over $400 million in assets under management.  

I can’t describe how emotional it is for me to share this milestone. As someone who spent the greater portion of his life on the ballfield, I never imagined that I would become an angel investor, let alone the founder of a global venture capital firm.

I remember when we started out in 2014 and were still putting our team together, I met with a multitude of US mainstream institutional LPs. We were of course shot down many times, but one time in particular left a deep impression when an investor looked me straight in the eyes and said: “It is literally impossible for you to raise money from institutional investors.” 

I think a lot of people when being handed such a blunt rejection would give up right there, but on a gut instinct I instead reacted with a question: “Then what should I do?” The funny thing is, after I asked my question, this particular investor came to like us, and even though they didn’t invest in us at the time, they eventually became a great friend and mentor.  

Somehow, we eventually managed to scratch together the capital for our first fund. Then, we set a unique and ambitious strategic direction: investing in the US and Asia at the same time! The thinking behind this plan was quite simple – if these were the two biggest markets with the most potential, then we should of course invest in teams from both. 

Not surprisingly, in executing this bold idea we came up against a lot of challenges. With most funds only focusing on one region, we found cross-market investing to be a bigger test of resource integration and management. Fortunately for us, we encountered a lot of people over the last eight years who believed in and supported us on the journey to today’s milestone. Since our founding, we’ve invested in over 150 startups from across the world, among them 10 companies that went on to be unicorns and over 27 that launched successful exits. Most importantly, for many of those companies, we were one of their earliest investors.

2021 was an especially significant year for Cherubic. Two of our portfolio unicorns went public and another was acquired by a huge global company, all of them becoming benchmarks in their respective markets. 

Established just five years ago, telehealth startup Him & Hers went public on the New York Stock Exchange, becoming the fastest-growing healthcare startup in the US. Meanwhile, omnichannel eCommerce solution provider 91APP became Taiwan’s first unicorn to launch an IPO on the Taiwan Stock Exchange, an accomplishment that attracted the attention of many overseas investors to Taiwan. Lastly, the Japanese buy now pay later platform Paidy was acquired by PayPal for $2.7 billion dollars. 

In addition, our number of unicorns doubled in 2021. Flexport, the leader in digital transformation for the logistics sector, hit USD$ 8 billion in valuation. Space startup and low-cost telecommunications satellites provider Astranis along with Tezign, the pioneering Contech startup in China, also reached unicorn status.

We are so lucky to have worked with these amazing startup teams from day one, to have had a front-row seat to their growth, and to have played a part in helping them realize their dreams. And in terms of our own journey, even though we picked a rougher road to travel, we still made it to today! One point that brings me particular satisfaction is to see that for our Fund V, our investors not only continued their funding, but continually increased the amount they were willing to contribute.  

Remember that investor that told me I would never raise a penny? Years after our meeting, while Cherubic was in the middle of another fundraising round, this person called me up and said:  “Matt, I think you’re ready, and we are also ready. We’ve decided to invest in you.” I can only say that some tears fell onto my phone. To receive this kind of validation not only made me see that all the effort was worth it, but it also filled me with gratitude for everyone that had ever put their faith in me.

Those who know me or read my blogs might notice how I keep coming back to the importance of “Never Stop Believing”. Perhaps the idea sounds overly romantic, but only on the faith of investors do those startups with nothing but their unique ideas and a drive to make the world better have a chance to realize their dreams. 

Reflecting on my own journey from athlete to entrepreneur to investor, if so many people hadn’t put their faith in me, there would be no Cherubic Ventures. That’s why I want our company to keep paying the power of that faith forward with our Fund V and investing in pre-product/market fit.

Our strategy goes beyond good faith investment to helping our portfolio teams grow through our strong global network of resources. It also gives us a practical edge ahead of many top-tier institutional investors by being the first to invest in companies that go on to be unicorns in their industries. A few examples: the world’s #1 sleep meditation app Calm, the leader in digital transformation of the logistics industry Flexport, Croatia’s biggest Edtech startup Photomath, Women’s physical and mental health startup Bellabeat, and Chaldal, the largest grocery delivery platform in Bangladesh. 

I’ll also mention that we have reserved 50% of our Fund V to support high-performing teams into later, even pre-IPO rounds.

Eight years already! Every day when I wake up, realizing I get to work with the smartest group of people in the world, brainstorm solutions to our challenges together, and make the future brighter, I feel filled with excitement and gratitude. 

I also want to take this opportunity to thank our founders, investors, Cherubic staff, and partners in the Cherubic community. Without all of you, we could not have reached this milestone. Each one of you is very important to Cherubic’s growth journey, and I am honored to have walked with all of you!

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