Life After Facebook: The Untold Story Of Billionaire Eduardo Saverin’s Highly Networked Venture Firm
Article Published by: Forbes.com
When Eduardo Saverin greets entrepreneurs who come to visit him in his eighth-floor offices at the Singapore Land Tower, the 36-year-old knows he’ll get asked the question. The Facebook question. The cofounder of the social media giant is not only one of the world’s youngest billionaires (net worth: $10 billion), but also something of a household name after his portrayal in the 2010 hit movie The Social Network. A year later he renounced his American citizenship, reportedly avoiding some $700 million in U.S. taxes. He’s always denied moving to Singapore for tax reasons and cringes at his Hollywood alter ego—he’s more comfortable behind a spreadsheet than on the silver screen. But he rolls with it, all in the name of furthering what he wants the world to know about the Eduardo Saverin of 2019, the cofounder of B Capital, a rapidly expanding venture capital firm that’s on the cusp of taking bigger swings.
“I’m incredibly open, because I understand where the curiosity comes from,” Saverin says in his first one-on-one interview for an article in seven years. “I’m happy to have them learn from me than otherwise through movies.”
Since launching B Capital in 2015, Saverin and his partner, Raj Ganguly, have been working on deploying their first $360 million technology fund (Saverin fronted an undisclosed part of it), guided by a twist on the traditional firm-building approach. Most venture capital firms start local, with a couple investments in companies in their backyards. Not B Capital, where 30 employees in California (San Francisco and Los Angeles), New York and Singapore pursued a multinational approach from the start. Also key: an alliance with Boston Consulting Group providing Saverin’s portfolio companies access to the elite consultancy’s brain trust and its clients. Now with several high-profile hires joining the firm, including a U.S.-based chairman and a new partner with Apple and Box credentials, Saverin and Ganguly are taking the wraps off their business, which has grown well beyond a billionaire’s hobby. They are expected to soon raise a second, much larger, fund
“No matter how lucky or blessed I might be, I will never retire on a beach,” says Saverin. “We are still so early into making the technologies that will impact the world.”
when Mark Zuckerberg celebrated his IPO by ringing the Nasdaq opening bell from Facebook’s California offices in May 2012, his cofounder Saverin was thousands of miles away and out of mind, save for a securities filing detailing that his 53 million shares were converting to common stock. No surprise there. Saverin’s stint with the company had ended in 2005, mired in controversy and lawsuits over his reduced stake in the company. By 2009, Saverin had moved to Singapore, giving up his U.S. citizenship. His life seemed a cliché: Gossip sheets gushed about his Bentley, a standing table at an elite night club and legendary bar tabs that could reach $50,000.
Saverin tells a different story today. The son of Brazilian parents who relocated to Miami, Saverin was born in São Paulo but grew up affluent in south Florida, attending boarding school there before heading to Harvard, where he made his fateful connection to Zuckerberg while a junior studying economics. After his involvement with Facebook, Saverin dabbled at several startup projects before moving to Singapore for what was supposed to be a short stay to help a friend launch a business. He never left, he says now, because he fell in love with a local —whom he’d known briefly in his college days—and with the city itself. “Being a technology guy, it’s an exciting place. It’s a five-hour plane ride from a large part of the world’s population.” His decision to renounce U.S. citizenship the year before the IPO, he says, had more to do with setting up roots in Singapore than paying a lower tax rate on his wealth. “It was nothing related to the news at the time. That is not true,” he says. That reported $700 million was a speculative “back-of-the-envelope figure,” says his spokesperson.
And to hear Saverin talk about it, he’s at peace with his Facebook past (and remains one of the biggest individual shareholders, with a 2% stake in the $475 billion company). Across two interviews, Saverin says the company is “incredibly close to my heart” and shares praise for Zuckerberg and COO Sheryl Sandberg’s leadership. “I’m incredibly proud of what Mark has done, to build an institution of its size and value. He’ll work hard to get things right,” he says.
Whether Saverin’s serenity is the result of maturity or careful practice, it’s unfaltering. As he speaks via Google Hangout in January, Forbes asks if he’s used a Facebook Portal, the video chat device the company launched in October to some criticism. Saverin bought one and hasn’t opened it, but he’s optimistic his son, now a toddler, will be one of Facebook’s next billion members. “Today, hopefully he doesn’t become a user at his age, he’s too young. But hopefully it will preserve and be something then,” he says.
In the years since he secured his once-in-a-lifetime stake—$2 billion at the time of IPO—he’s embraced a new role as venture capitalist at B Capital, the firm he cofounded in 2015. While cofounder Ganguly oversees more of the day-to-day management, Saverin’s on every investment call and oversees one key aspect of B Capital’s strategy, its investments in Southeast Asia and India. Although he keeps a lower profile among Singapore’s party set, now famous from Crazy Rich Asians, access to Saverin is one key component of the B Capital pitch. “People come in expecting him to be a rock star,” says Ganguly. “And he sits with the entrepreneur and starts asking about first-time delivery success rates.”
Ganguly’s worked with Saverin since 2012, when the friends from their Harvard days—Ganguly got his business school degree there—reconnected in Singapore. Saverin was already writing smaller checks to startups, but with Ganguly, a former consultant and vice president at Bain Capital, he set out to raise formal funds from outside investors. Their first effort was Velos Partners, an $80 million private equity vehicle with a consumer bent they launched with several other friends. But by 2015, Ganguly and Saverin split off with a new idea to build a firm around two points of distinction: as a strong footprint in Southeast Asia, an emerging market with less competition for deals, and as a matchmaker for one of the world’s most prominent consulting firms, Boston Consulting Group.
Look at B Capital’s portfolio today—it’s made about 20 investments—and you’ll see a pattern of international opportunism. Saverin and Ganguly have favored companies involved in commerce and logistics, specifically European, Indian and Asian companies that don’t make it onto Silicon Valley’s radar and where their knowledge of local complexity can help.
One example: Ninja Van. A last-mile logistics provider for delivery services in Southeast Asia, the Singapore-based startup employs 2,000 people and works with 10,000 drivers. It’s an expensive, complicated business, but B Capital stepped in to write a check when others balked. “Eduardo and the team asked the right questions,” says Lai Chang Wen, CEO of Ninja Van. “They’re able to give us a wider perspective across businesses and geographies.”
Then there are more traditional VC-backed companies in healthcare and business software where B Capital’s U.S. team pitches its access to BCG. Armed with deep knowledge and executive connections, consulting firms have tried their hand at venture capital investing for years. But venture arms have traditionally been viewed as distractions from the consultancies’ core businesses and usually are the first projects to get cut when the economy slows. Ganguly’s and Saverin’s big idea was to provide much of the benefit with no strings attached. BCG is a passive investor in B Capital, meaning they only call in the consultants when founders ask. “It’s the cherry on top of the cake,” says Sam Bodas, CEO of Bellevue, Washington-based Icertis, a contract management software maker that has signed at least three multimillion-dollar deals from connections made by senior partners at BCG.
Those ties impressed B Capital’s newest partner, Karen Appleton Page. The former Box and Apple executive is joining B Capital in its San Francisco office, giving the firm seven partners. Of the early days of Box, when she was the eighth employee and ran business development, Page says: “At Box, we would have given our teeth for those connections to BCG.”
Giving B Capital even more street cred: Howard Morgan, the cofounder of First Round Capital, known for his early investments in Uber and Warby Parker, came out of retirement in 2017 to become chairman of the entire firm.
B Capital is growing fast. But it’s too early to say if Saverin’s second act is a success. The firm hasn’t had any exits yet. Only about half a dozen of its investments carry significantly higher valuations than when B Capital invested, and it got into its best-known brand—scooter company Bird—relatively late. But Saverin and Ganguly are optimistic. With its first fund nearly fully committed, B Capital will go out to raise a second fund expected to be twice as large, sources tell Forbes. B Capital declined to comment on its fundraising plans.
Founders who meet with Saverin and B Capital in 2019 can’t be sure if they’re sitting down with a future Midas List-caliber tech investor or a billionaire dilettante. But as in his second act as venture capitalist, Saverin is uniquely positioned to guide entrepreneurs through the perils of success. Facebook famously implored its early employees to “move fast and break things.” Fifteen years later, its estranged cofounder offers up a twist on the old motto for 2019: “Make mistakes all the time, but learn from it immediately,” Saverin says. “Apologize if it affects anyone else. And make sure you don’t make that mistake again.”
About Jaime Bonetti Zeller
Jaime Bonetti Zeller is an investment professional and entrepreneur with businesses in multiple industries. He is president of Servicios Consulares Eurodom, the local partner in the Caribbean region for VFS Global, a leader global outsourcing and technology services specialist for diplomatic missions and governments worldwide. Jaime Bonetti Zeller also started the company Sofratesa de Panama inc., an organization in the engineering services industry located in Panama City.