Startup studio super {set} has a new outing under his belt with the sale of marketing company Habu to LiveRamp for $200 million in January. Now, super{set} is adding another $90 million to its coffers as it doubles down on its strategy to build business startups.
“In some ways, very little has changed since our launch. We remain an entrepreneurial studio focused on building data and AI-driven companies. We found, funded and built new technology startups, primarily in the enterprise space,” founding partner Tom Chavez told TechCrunch.
What has changed since 2019, however, is the rest of the market. and Chavez sounds vindicated. Creating “admittedly boring but exuberant products,” as TechCrunch put it at the time, has proven to be a solid enough bet that the super{set} is now doubling down. In total it has secured $176 million in funding so far.
There are many venture studios out there — according to one of them, Boost business, “the venture builder phenomenon began in 1996 and has built momentum over the past decade to become the new norm with massive funding and a long list of expenses.” But the advantage of super{set} is that it is managed by constructors with their own stable history.
While super{set} is backed by outside investors, including family offices and tech investors, some of its capital comes from Chavez and fellow founding manager Vivek Vaidya. The pair previously co-founded Krux, which they sold to Salesforce. And previously, Microsoft bought Rapt, which Chavez co-founded and where Vaidya served as CTO. Together, those two exits totaled $1.2 billion, and the duo are now putting some of their earnings into super{set}.
“Our investors like to see that. they know that we are fully aligned in terms of the results and the investments we make,” Chavez said. “But we’re also very fortunate to have a pretty interesting and diverse base of LPs, who bring a lot of expertise and ask a lot of useful questions about what we’re doing.”
The studio’s focus on artificial intelligence is undisputed, but unlike many investors who support fundamental AI, super{set} is more interested in what it refers to as the engineering of artificial intelligence.
“The LLM platform creates a great opportunity for people like us who want to understand how to build useful applications based on all these kinds of systems,” Chavez said, describing the growing interest and innovation around large language models.
While entrepreneurs could go it alone, super{set} offers them an alternative to running up and down Sand Hill Road trying to find funding for an unproven idea, Chavez said. “We’re removing all of that so the teams can just focus on the product and the customers.”
Venture studio, super{set) style
A tougher fundraising environment can create headwinds for entrepreneurial studios, and not just because it’s easier to attract entrepreneurs. Investors also want to know that the studio will acquire enough ownership to make a significant return if a company becomes successful.
However, there is a line between owning enough and excessive ownership, especially when the added value is not clear. The venture studio space is still a pretty broad spectrum, but according to Chavez, the super{set} model is “quite different from what most venture studios do.”
One big difference is volume: With 16 companies in its portfolio, super{set} is much more hands-on than studios that create a dozen companies every month. It will even reduce the number of companies it creates to two or three a year, compared to four or five in its early days.
The couple doesn’t pursue every idea that comes their way. One tool is a solution note, its version of the standard venture capital investment note, which is an analysis of whether an opportunity is worth pursuing. That’s one aspect in which the super{set} has changed compared to 2019, Chavez said, as his method went from art to science.
Whether it’s science or art, Chavez and Vaida are good at picking people to work with, said Alex Bangash, a limited partner whose VC fund, platform transfer, has several startup studios in its portfolio. “Tom and Vivek are not just focused on attracting the right talent, but also on identifying who has the power to become a co-founder and then to elevate and grow that talent with their company.”
After validating an idea, super{set} finds a product-driven co-founder, and their help moves from hands-on guidance to lighter guidance over time, but without a cliff as in an acceleration program. In the early days, his support includes recruiting, marketing, sales and fundraising.
The co-founders, and later, the companies, can also work from the new super{set} space it recently moved into: the entire fourth floor of San Francisco’s landmark 140 New Montgomery building, which also houses VC firm Greylock. While born and raised in Albuquerque, Chavez moved to San Francisco about 30 years ago, and is optimistic about the city, especially in the current “artificial intelligence revolution.” super{set} wants to continue.
