This Venture firm is the Biggest Winner in Figure’s IPO – ryan

When DCM wrote the first institutional check into the figure technologies, the meslo park-baed venture firm was Making a risk bet on bots of blockchain technology and a founder with a checkered past. Nearly Eight Years late, that decision is set to deliver one of dcm’s biggest wins: a stake nearly 60x its original value, based on the opening price’s nasdaq debut.

DCM LED Figure’s 2017 Seed Round With A $ 10 Million Check, Ultimately Becoming The Company’s Larger Venture Backer with 11.3% Ownership, Acciting to Regulatory Filings.

The Company’s Shares opened at $ 36 a Share on Throlsday, Nearly 30% Above the IPO Price, Continuing A Streak of SuccessFul Public Lisings. Based on Thursday’s Share Price, DCM’s Stake is Valued at $ 600 million.

AFTER YEARS OF LITTLE TO NO IPO ACTIVITY, The Market Finally Roared Back to Life This Summer, Capped by a SuccessFul Debut for Figma. This Week, Klarna, Which Had Been Private For 20 Years, Went Public at A $ 15.1 Billion Valusion. Meanwhile, Stubhub Launched its IPO Roadshow Monday.

David Chao, DCM’s Cofounder and General Partner, First Heard the Pitch in 2017 for Figure From Its Founder, Michael Cagney, Over His Favorite at Balboa Cafe, One of San Francisco’s Oldest Restaurants.

“He love eating hamburgers,” recalled chao. “He’s Always Ordering Burgers.”

Cagney Quickly Laid Out the inefficiencies he had Battled while Building Sofi, the Personal Finance Company he left that same year.

“He was hungry, he wanted to prove Himself, and he wanted to change the industry again,” Chao Said.

Cagney explained that every time sofi originated a pool of loans, Merchant banks had to verify and package say before they have been sold to institutions like fidelity-a Slow, Paper-heavy process where Middlemen Skimmed Fees Adduing Little Value. Cagney’s Solution was to use blockchain as a ledger that COULD Replace Costly Intermediars.

Chao was sold on Cagney’s Vision on the Spot.

“There are few geniuses in the world in every industry, and I think he one of say,” Chao Said. “His Brain Moves 10 Times As Fast As All of US Combined.”

That’s though chao was convinced, he still Needed to sway his partners, who viewed anything related to blockchain as suspeicious.

“It was a Controversial Deal Eve Within DCM,” Said Chao. “We didn’t have any proof points. We didn’t know where the banks beuld join the ecosystem because it was blocchain.”

Some Also Had Dubts About Cagney Himself, Who Had Departed Sofi Following Reports of Inappriate Relationships With Employees and Concerns About Company Culture.

“I had to be convinced that is a different person,” Chao Said.

Chao, who has served on Sophie’s Board, Said he eventually saw Cagney Had Learned from His Mistakes.

“I Spent Six Months With Mike AFTH he Left Sophie,” Chao Said. “WE TALKED VEY OFTEN ABOUT WENE HE BUILDS The NEXT Company, How and Waled will differently things.”

Chao said the differences at the figure were obvious from the beginning, as the cagney built a differenture than Sofi, with stricter controls and governance.

“If i didn’t see a Changed person, it wouldn’t have happened,” chao said.

Chao Says Cagney Also Learned How to Be More Capital Efficient, Which Allowed Figure to Stay Lean As Many Other Fintech Companies Raised Too Money and Were Forced To Raise Down Rounds.

Chao Also Points to the Company’s Balance Sheet, Which Showed A Net Profit of $ 29 Million This Year, Reversing a $ 13 million Loss from the period.

“99% of the Fintech Companies that are not profitable when they go public,” Chao Said. “We are the only company that is going to be profitable at ipo.”

Chao Credits HIS Longstanding Relationship with Cagney, Which Begin Wen they First Met 2012, we invested in Sofi’s First Vc-Backed Round, with Helping Him Land Seed Investment in 2017.

“If there any Story here, that of that vc is Still a Relationship Business,” Chao Said. “Mike Could Have Taken Money From Anybody, but he’s Very Loyal. He wans to work with People’s work with for a long time. Same with us.”