Formation 8 builds on success, raises $500 mln, boosts staff

Formation 8, which was founded in 2011 and has already scored at least one home run exit, announced on a blog post in early December that it has raised $500 million for its second fund.

A couple of weeks later, Formation 8 announced that Singapore-based investor Joel Sng has joined the firm as a partner. Sng, a Harvard University graduate, has a portfolio in China that includes smartphone manufacturer Xiaomi; gaming company Razer; and SF Express, a courier services company in China.

In the United States, Sng has invested in Airbnb, Coursera, Facebook, Palantir and Uber.

Formation 8 said the new partner will divide his time between the San Francisco Bay Area and Asia, where its portfolio companies look to market.

He’s not the only new member of the high-flying venture firm. In announcing its second fund, Formation 8 also said that Shirish Sathaye joined the firm as a general partner earlier this year and that Pierre Lamond will join Gideon Yu as special advisors. 

San Francisco-based Formation 8 raised $448 million for its first fund and was an early investor in virtual reality headset maker Oculus VR, which Facebook bought for $2 billion. The firm also had another notable exit when Salesforce purchased RelateIQ for $390 million.

The firm in 2013 also invested in Thalmic Labs, a developer of wearables technology, co-investing alongside Spark Capital, which was also a co-investor in Irvine, Calif.-based Oculus.

Formation 8 co-founder Jim Kim said the firm looks for companies where there’s an “A-plus” engineering team, technical risk is largely mitigated, and there’s real potential for a billion-dollar-plus business. Formation 8 shoots for a 20 percent to 30 percent stake in the companies it backs, Kim said, and the portfolio is heavily tilted to companies looking to sell their wares in Asia.

That was the case for UtiliData, a Formation 8-backed developer of power automation control systems that is marketing to customers in China, Korea and U.S. markets Kim said the firm also helped founders of another portfolio company, mobile shopping startup ContextLogic (operating as Wish) set up its ContextLogic Korea division. For Oculus, Formation also helped set up partnerships in Asia, Kim said.