Social Capital sacks two companions over ‘state of affairs’ involving AI funding

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favorite tales on this weekly e-newsletter.Chamath Palihapitiya’s enterprise capital group Social Capital has fired two of its most senior companions and employed a legislation agency to analyze an undisclosed “state of affairs” associated to its funding in Groq, a synthetic intelligence chips start-up.In a letter to buyers despatched this week, Social Capital mentioned it had fired Jay Zaveri, its head of early-stage and enterprise investing who had been a companion since 2015, and Ravi Tanuku, who had been head of public markets and M&A since 2020.The letter, which was described to the Monetary Occasions, mentioned Social Capital had retained legislation agency Wachtell Lipton to analyze a “state of affairs” it had develop into conscious of final Tuesday, though it didn’t present additional info. It additionally mentioned the corporate was working with the heads of its portfolio corporations on whose boards Zaveri sat to make sure an orderly transition.Social Capital mentioned in an announcement: “Now we have terminated the employment of two of our workers because of employee-specific circumstances. Now we have no additional feedback right now.” Bloomberg first reported the information that the companions had been fired.Zaveri and Tanuku didn’t instantly reply to a request for remark. Social Capital declined to remark additional, and Groq couldn’t instantly be reached for remark. The event pertains to Social Capital’s funding in Groq, based on two individuals with data of the state of affairs. Social Capital backed the Silicon Valley firm in 2017 and 2018, together with investing $52.3mn in a $60mn convertible be aware. Groq has since boomed in worth, elevating $300mn in 2021 in a spherical led by Tiger World Administration and D1 Capital that valued it at greater than $1bn.The individuals with data of the matter mentioned the 2 companions had just lately marketed a particular goal automobile set as much as promote an allocation within the convertible be aware fundraising.Social Capital has had a risky few years beneath the management of its founder, former Fb govt and “Spac king” Palihapitiya, who was probably the most vocal promoters of the wave of blank-cheque corporations that launched between 2020 and 2022. He launched the fund in 2011, elevating $1bn and making early investments in corporations, together with Slack. He slimmed it down in 2017 after a collection of high-profile exits, successfully turning it right into a household workplace. He tried to lift a brand new fund from exterior backers in 2022 however deserted the plan earlier this 12 months.

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