Formation 8 was a venture capital firm based in San Francisco, California, known for its investments in technology startups. Active from 2011 to 2015, the firm was founded by Joe Lonsdale, Brian Koo, and Jim Young. It gained prominence in the venture capital landscape by raising substantial funds and backing a portfolio of high-profile companies before its partners amicably dissolved the firm to pursue new ventures.
History
Formation 8 was established in 2011 by a team of experienced entrepreneurs and investors. Joe Lonsdale was a co-founder of Palantir Technologies and Addepar. Brian Koo, from a prominent South Korean industrial family, brought a network of international connections and capital. Jim Young was a co-founder of Hotwire.com. The firm aimed to leverage its founders' operational experience and global network, particularly focusing on connections between Silicon Valley and Asian markets, to identify and nurture promising technology companies.The firm quickly gained recognition in the venture capital community. It successfully raised two main funds during its operation:
- Fund I: Closed in 2012 with approximately $180 million.
- Fund II: Closed in 2014 with approximately $448 million. These funds attracted capital from a diverse base of limited partners, including institutional investors, university endowments, and family offices, with a notable presence of capital from Asia.
Investments
Formation 8 built a notable portfolio of investments across various technology sectors, including enterprise software, healthcare, and virtual reality. Some of its most prominent investments included:- Oculus VR: An early investor in the virtual reality headset company, which was later acquired by Facebook (now Meta Platforms) for $2 billion.
- Palantir Technologies: Due to co-founder Joe Lonsdale's prior involvement, Palantir became a significant early investment for Formation 8.
- RelateIQ: A sales productivity platform that was acquired by Salesforce.com for $390 million.
- Oscar Health: A health insurance company focused on technology-driven user experience.
- Wish (ContextLogic): An e-commerce platform.
- Affirm: A financial technology company offering point-of-sale loans.
Dissolution and Legacy
In late 2015 and early 2016, Formation 8 announced its amicable dissolution. The partners decided to split into separate entities, primarily due to differing investment strategies and operational philosophies as the firm grew.- 8VC: Joe Lonsdale and Alex Moore (a partner at Formation 8) co-founded 8VC, a new venture capital firm focused on big data, artificial intelligence, and enterprise software. 8VC continued to manage the existing portfolio of Formation 8's second fund.
- Formation Group: Brian Koo founded Formation Group, which continued to focus on early-stage investments, particularly leveraging its Asian network, and managing parts of Formation 8's first fund.
- Jim Young transitioned to an advisory role and pursued other entrepreneurial ventures.
Despite its relatively short lifespan, Formation 8 made a significant impact on the venture capital landscape, known for its substantial funds, high-profile exits, and the subsequent formation of new, influential VC firms by its founders. Its model of combining operational experience with a strong international network influenced subsequent venture capital strategies.