Defy defies the odds in funding Series A companies

Last fall, Defy Partners quietly raised $151 million for its maiden fund. Although the firm has largely operated under the radar since it wrapped up its fundraising, its Series A dealmaking is drawing attention.

Co-Founders and Managing Directors Neil Sequeira and Trae Vassallo told VCJ that they went off to the races after the final close, investing in several companies. The firm took part in two recent deal fundings as it has unveiled its full portfolio on its website.

Investments include Owl, the Palo Alto, California, developer of an automobile-security camera. Defy led the $18 million Series A this year and took part in the $10 million A1 round that Canvas Ventures led.

Another investment announced mid-August was Airspace Technologies, the Carlsbad, California, provider of a delivery-and-logistics platform. Defy led the company’s $8 million Series A round.

Defy has also invested in Grove, Boom Fantasy, Agentology, MIXhalo, FTW and Pullrequest. Another deal, in the VR sector, remains in stealth and has not yet been announced.

Vassallo and Sequeira say they expect to invest in 20 companies with their first fund, leading the Series A round in most cases and taking a board seat 70 percent of the time.

The firm is not sector-specific, but its portfolio combines consumer-facing SaaS technology and industries that are traditional offline but are ripe for innovation.

San Diego-based Agentology, for instance, operates a platform on which real estate agents can manage sales leads. Defy led the company’s $12 million Series A round this year.

Defy did not disclose its LPs, but Vassallo and Sequeira said they raised the fund only from U.S. investors, including endowments, large family offices and nonprofits.

As for its investment target, the firm invests in people as much as companies, Vassallo said.

“We look for authentic founders who provide the best tech solutions,” she said.

“There are so many high-valued consumer companies that are tech-enabled. We’re looking for tech-enabled solutions from companies that are aiming to disrupt how we live, work and play.”

Vassallo and Sequeira rely primarily on their network to source deals. Sequeira was a managing director at General Catalyst for 11 years, having invested in Vitrue and Honest Co, among others. He said he knew the founder of Boom Fantasy, the New York fantasy-sports app, from 12 years ago.

Vassallo worked at Kleiner Perkins Caufield & Byers for 11 years, where she invested in Nest Labs, Dropcam, and Opower.

The firm’s backing of Owl came about because Founder and CEO Andy Hodge was previously with Dropcam.

Vassallo and Sequeira never worked together on deals, but they say they had overlapping networks and mutual friends who tried to introduce them to each other.

The connection that linked the pair was Steve Vassallo, a Foundation Capital general partner who was at a Warriors game with Sequeira and urged him to get in touch with Trae, his wife.

Vassallo and Sequeira launched Defy in 2017. The firm is based in Woodside, California, next to the office of Benchmark.

Vassallo and Sequeira say they don’t plan to expand much when they raise their sophomore fund, which may be in a couple of years. They said they’ll likely aim to raise the same amount and slowly grow the partnership.

“We’re not looking to get greedy,” Sequeira said. “This is not about getting rich fast but about partnering with entrepreneurs and helping them grow.”