Secretive Spac man Ian Osborne started $ 1.5 billion venture capital firm

When tech financier Ian Osborne invests in a company, executives have to agree to an unusual clause: don’t talk about it without his permission.

Such tactics have helped Osborne and his company Hedosophia go largely under the radar despite being involved in high-profile investments and take-over bids over the past decade.

With early backing from funds linked to media baron Michael Bloomberg, Hong Kong mogul Li Ka-shing and the German Burda family, Osborne, 38, quietly started a $ 1.5 billion venture capital firm. dollars.

According to people familiar with the matter, companies ranging from Spotify, TransferWise and Raisin in Europe to Alibaba, Ant Financial and Airwallex in Asia have all received investments from Osborne.

One tech investor compares the courteous but reluctant British investor to well-connected PR fixer Matthew Freud: “He knows everyone.” Another, who did his due diligence before working with Osborne, said: “He’s the kind of guy who will show up behind you on a flight to Rio. He’s a real mysterious man.

As one of the architects of the Special Purpose Acquisition Company (Spac) boom – which raises cash in listed funds that then seek out a company to go public – Osborne has helped boost technology assessments.

Even as the US market cools off in the face of the phenomenon and regulatory scrutiny intensifies, Osborne hopes to popularize these blank check vehicles in Europe with a plan to raise up to 460 million euros with a Spac listing in Amsterdam.

Michael Bloomberg has become a common thread in Ian Osborne’s career © Joe Raedle / Getty

Described by contacts as “obsessively secretive,” Osborne fiercely protects his privacy and allows publicity to be drawn to prominent partners such as venture capitalist Chamath Palihapitiya.

Palihapitiya, a brash ex-Facebook executive, with a huge social media base and a love for making provocative comments on television, describes Osborne as “really good yin for my yang.”

The moonshot machine

It was for the relaunch of Spacs in 2017 that Osborne became best known – by partnering with Palihapitiya Share Capital to support lists of companies such as Virgin Galactic, Clover Health and Opendoor.

Along the way, Osborne has amassed stocks worth up to $ 300 million, according to a person familiar with the matter, spurred on by hefty “promotional” stock prizes awarded to registration sponsors.

To friends and investors alike, he is a savvy negotiator and consummate networker, connecting wealthy family offices with founders who need funds to grow.

Others fear he has been at the forefront of a wave of speculative liquidity, granting stratospheric valuations to unproven companies.

Virgin Galactic – which he helped publicize in 2019 – opened the floodgates for moonshot companies with little revenue to list through Spacs. More than 300 Spacs have raised $ 97 billion this year, according to Refinitiv.

With the action now moving to Europe, it marks a homecoming for Osborne, who divides his time between homes in London and Hong Kong, where he resides.

Chamath Palihapitiya

Chamath Palihapitiya describes Ian Osborne as “ a very good yin for my yang ” © David Paul Morris / Bloomberg

From Bloomberg to Zuckerberg

Born and raised in Richmond, London, the son of a lawyer and doctor, Osborne studied at St Paul’s School, King’s College and the London School of Economics, graduating in 2005 and going to work for as an advisor to Bloomberg, who has become a thread through Osborne’s career.

Kevin Sheekey, longtime campaign manager and chief communications officer for Bloomberg, said Osborne started working for the then New York mayor after co-hosting a dinner in London whose guests included the actress Claudia Schiffer and media scion James Murdoch.

In 2007, thanks to Osborne’s connections, Bloomberg was addressing the Conservative Party conference in Blackpool. “It sounds easy to do, but connecting people is a rare talent,” Sheekey said. “Dozens of people around the world that Mike and I have a good relationship with have been introduced by Ian. Global business leaders never meet without an intermediary. There are no yellow pages for this. ”

He describes a Zelig-like quality in Osborne: “His nature is not to promote himself.”

As Bloomberg’s international advisor for the next four years, Osborne continued to unleash his networking skills, reaching out to people who would become his ticket to the world of tech finance.

“At first it was like, ‘What are these 20 Britons doing in the middle of American politics?’ It didn’t make much sense, ”said Daniel Ek, founder of Spotify, who met Osborne around this time.

Initially, Osborne offered “advice, connections with people”, according to Ek. “But his Rolodex was off the charts for someone so young. The connection between politics and business seems to be obvious today, but at the time, no one made the connection.

Osborne began advising and later investing in the share capital of Palihapitiya after meeting him with Mark Zuckerberg in 2008.

Palihapitiya described Osborne as “extremely, exceptionally low-key and incredibly trustworthy. He’s incredibly connected. He’s our modern version of a homeless billionaire. Ian is constantly working, constantly traveling and collecting people.

Virgin Spaceship

Ian Osborne teamed up with Chamath Palihapitiya share capital to support Virgin Galactic listing © Virgin Galactic

In 2009, he set up his own consulting firm, Osborne and Partners, which took on clients including DST Global, the venture capital firm run by Yuri Milner, the Israeli-Russian billionaire.

In 2010, he was helping DST lead investments in Spotify and Alibaba – where he had established relationships with founders Ek and Jack Ma, respectively.

Throughout his work with DST and thereafter, Osborne went on to lead a public relations and business development consultancy, advising the firms of American tech billionaires, from Travis Kalanick and Evan Spiegel to Zuckerberg. He remained close to Bloomberg, contributing to an attempt to buy the Financial Times from Pearson in 2013.

That year he was firmly established on the tech scene as one of the organizers of Davos’ hottest party – a ‘taxidermy’ themed party hosted with Napster co-founder Sean Parker and CEO of Salesforce Marc Benioff.

He had also started working informally for then British Prime Minister David Cameron and Chancellor George Osborne, whom he remains close to, helping to open doors to the United States. During the 2010 election campaign, he helped prepare Cameron for televised debates. Around the same time, he organized a trip to the United States for Boris Johnson, then mayor of London.

Osborne became the “ultimate co-host” – according to a person familiar with the time – bringing together people from politics, technology, finance and the arts. It was at a dinner hosted by Osborne in 2014, attended by actor Ed Norton and Arianna Huffington, that an Uber executive got into trouble for suggesting the company could dig up a critical journalist.

Bring ‘IPO 2.0’ to Europe

Osborne established Hedosophia in 2012 – named after the Greek gods of pleasure and wisdom – with the goal of specializing in leading technology companies.

Early backers included family offices such as Germany’s Burda and funds linked to Hong Kong tycoon Li, said a person close to the group, who added that it now has a base of More institutional investors made up of university endowments, public pension funds and insurance companies from the United States, Japan, Canada and Sweden.

Daniel Ek, Founder of Spotify

Daniel Ek, founder of Spotify, recalls thinking that “ Osborne Rolodex was off the charts for someone so young ” © Drew Angerer / Getty

It was during a dinner in Hong Kong in early 2017 with Palihapitiya that he pitched the idea for a new type of Spac to give tech founders an easier public list without the risk and regulatory baggage of a traditional IPO.

Although they are partners of the sponsoring company, the couple did not share the profits equally, people with knowledge of the situation said, with Palihapitiya taking the majority of the profits but also investing more capital. Palihapitiya also coined the new term for Spac – “IPO 2.0” – which was draped over the New York Stock Exchange when it launched in 2017.

Since then, hundreds of Spacs have followed this strategy, pioneered by former bank executives, athletes and politicians keen to take advantage of the virtually risk-free benefit of the Spac sponsorship model. But even those who operate around Osborne wonder if the market has now gone too far. “The bubble is definitely bursting now,” said one.

The Osborne / Palihapitiya Spac franchise was hit as the market turned – shares of Clover falling more than 50% from their highs and shares of Virgin Galactic – which has yet to perform a commercial flight – down more than 70% compared to the Peak.

Osborne is determined to get his European Spac right, according to those close to the plans, by reducing the financial rewards for the sponsor and putting together a heavy board.

This month, he will also look back on an early passion in the theater, producing one of the first musicals to open after the end of the pandemic restrictions in the West End – Everybody’s talking about Jamie.

He will have to get used to being center stage – in Europe at least he has no Palihapitiya to hide behind, and the scrutiny of Spacs in the US has started to raise questions for investors. and sponsors on the verge of whether the market has gone too far. , too fast.

Additional reporting by Tim Bradshaw and Arash Massoudi

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