Jay Z invested in Uber in 2011 and today it’s worth 200X more. Now he’s getting serious about investing in startups with plans to create his own venture capital firm, according to respected tech journalist Dan Primack’s publication Axios.
Jay Z is building the fund with long-time partner and Roc Nation co-founder Jay Brown. They plan to focus on seed investments in young startups. They’ll get some help from Sherpa Capital, which was created by some of Uber’s other early investors. Jay Z’s fund will have its own brand and Sherpa’s staff won’t lead its investments, though, Axios reports.
Now Jay Z is looking for a full-time venture partner to help lead his fund, since he has other jobs…like being one of the world’s most famous rappers. He also has stakes in the Rocawear clothing and several alcohol brands, plus owns the music streaming service Tidal.
The entertainment and business mogul’s success across industries and his celebrity could help him gain access to the most competitive and lucrative startup investment deals.
Here’s a look at Jay Z and Roc Nation’s past investments and how they’ve fared since:
- Stance – The Jays’ Roc Nation invested in premium sock company Stance’s 2011 Series A of $6 million. It’s gone on to raise a total of $116 million from top Silicon Valley investors, signalling that it’s doing well.
- Uber – Jay Z invested in its 2011 Series B when it was valued at just $300 million pre-money. Now it’s believed to be valued at $62.5 billion, netting Beyonce’s husband a massive return
- Viddy / Supernova – Roc Nation invested in buzzy “Instagram for video” app Viddy in 2012 before Instagram became the Instagram for video. The startup failed, rebranded as Supernova, and was sold it what was likely a firesale to Fullscreen, so they Jays likely saw little to no return.
- BlackJet – Roc Nation backed private jet startup BlackJet in 2012 before the company crashed and burned alongside the Jays’ money.
- JetSmarter – Undeterred by BlackJet’s failure, Jay Z personally invested in JetSmarter’s 2014 $5.2 million Series A and 2016 $105 million Series C. This “Uber for private planes” startup is hoping people will pay huge upfront membership fees for free luxury flights later.
- Devialet – One of Roc Nation’s most recent investments was in high-end french speaker maker Devialet. It’s too early to tell if its 2016 stake in the startup’s €100M Series C will pan out, but Devialet speakers get rave reviews and are sold at Apple stores.
Overall Jay Z and Roc Nation have managed to pick some promising startups that have gone on to raise a ton more money. That makes him a successful VC on paper, but he’ll need some big IPOs or acquisitions to lock in his earnings.
The majority of venture capital gains come from a tiny set of startups that grow huge. If Jay Z’s upcoming fund can leverage his branding expertise, promotional influence, and the desire of founders to buddy up with the star, it might be able to get a piece of these future blockbusters.