Zynga founder Mark Pincus is raising up to $ 700 million for a new investment fund that will focus on technology companies that are listed on the stock exchange and in need of strategic restructuring, according to a new Axios report. He says his new firm is called Reinvent Capital and that Pincus is founding the team with hedge fund manager Michael Thompson, who has been running his own New York-based firm, BHR Capital, for the past nine years.
Reinvest’s plans, says Axios, involve investing in up to 15 Internet, software and media companies, adding that the company will have an “independent size” and will work with small, medium and large capitalization companies.
Pincus has been a founder and operator since graduating from the Harvard Business School in the early 1990s, co-founding an early Internet company called FreeLoader, a web-based push technology service that sold a couple of years later to a public company now defunct. Pincus went on to found SupportSoft, a pioneer in technical support and cloud services, and then created an early social network called Tribe.net, before founding the social gaming company Zynga in the spring of 2007.
The company went public in 2011 with a valuation of $ 7 billion. Considered vulnerable to competition and the whims of Facebook, whose rules had already changed in a way that hurt Zynga and his IPO, his actions began to slide almost immediately. Today, the company’s market capitalization, where Pincus remains a non-executive president after having twice entered inside and outside of senior management positions, is $ 3.7 billion.
That Pincus becomes a full-time investor is less surprising than the stage of the companies to which he is reportedly going. Pincus has been an active investor for a long time, although normally (as far as we know) he is participating very early in companies. Among his most recent bets in the seed stage, for example, is Spatial, a cross-reality collaboration platform based in Emeryville, approximately one year old, that converts rooms into 3D workspaces and that raised $ 8 million in seed funds last fall, including Pincus, along with many other individual investors and initial risk firms.
Another is Invisible, a company based in New York that says it can help clients outsource their work (professional and personal) to real humans through AI, and raised $ 2.6 million in seed funds last fall.
A third recent and slightly more advanced bet focuses on Cargo Systems, a new 2.5-year-old company based in New York that helps travel drivers to earn money by taking the convenience store to their vehicles and raised $ 22 million in Series A funds led by Fundadores de fondo in September.
In fact, Pincus seems to have generated much of his wealth through a very early bet on Facebook. According to technology journalist David Kirkpatrick’s book, “The Effect of Facebook,” Pincus, along with his old friend Reid Hoffman, had written an advance check of $ 40,000 for the company. When Facebook became public, Pincus sold approximately one million shares, about a fifth of its share at that time, so it was expected to be $ 35 million in pretax dollars.
It is said that Hoffman, who is a co-founder of LinkedIn and is now a partner in the venture company Greylock Partners, is advising Reinvent Capital. It is only the last effort in which the two are joining.
In the summer of 2017, Pincus and Hoffman announced an effort called Win the Future, or WTF, which purported to be a “new movement and force within the Democratic Party,” Pincus said as he left Recode. Designed to be a platform and movement of equal parts, he began his life by allowing site visitors to vote on issues such as whether engineering degrees should be free for all Americans. The site no longer presents much at all, apart from a descriptor as a “non-partisan project laboratory”.
Hoffman recently landed in hot water after it became known that he had indirectly contributed funds for a deceptive campaign on social media aimed at helping Democratic candidate Doug Jones win the Alabama state senate race in 2017. Jones narrowly won; Hoffman said he had no knowledge of the project, did not endorse his tactics and “categorically” disapproves of using misinformation to influence a campaign