Spac Secretary Ian Osborne has built a $ 1.5 billion venture capital firm

When tech financier Ian Osborne invests in a company, executives have to accept an unusual clause: not talk about it without their permission.

These tactics have helped Osborne and his company Hedosophia fly largely under the radar despite their involvement in high-profile investments and takeover bids over the past decade.

With the first fundraiser linked to media baron Michael Bloomberg, Hong Kong mogul Li Ka-shing and the Burda German family, Osborne, 38, has quietly set up a $ 1.5 billion venture capital business.

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

A tech investor compares the urban but reluctant British investor to the well-connected public relations fixer Matthew Freud: “He knows everyone.” Another, who carried out the necessary diligence before working with Osborne, said: “He’s the guy who will appear behind you on a flight to Rio. He’s a real man of mystery.”

As one of the architects of the boom in special purpose acquisition companies (Spacs) – which raise money from listed funds that then seek a company to make them public – Osborne has helped value turbocharging technologies.

As the US market cools and regulatory control grows, Osborne hopes to popularize it blank check vehicles in europe with plans to raise up to 460 million euros with a list of Spac in Amsterdam.

Described by contacts as “obsessively secret,” Osborne fiercely protects his privacy and allows high-profile partners like Chamath Palihapitiya, a venture capitalist, to be advertised.

Palihapitiya, a cheeky former Facebook executive with a great following on social media and a love for provocative commentary on television, describes Osborne as “a very good yin for my yang.”

The moon making machine

It is for the relaunch of Spacs in 2017 that Osborne is becoming the best known: it joins with Palihapitiya’s share capital to support the lists of companies such as Virgin Galactic, Clover Health and Opendoor.

Along the way, Osborne has amassed shares worth up to $ 300 million, according to a person familiar with the matter, driven by the juicy “promote” stake awards awarded to list sponsors.

For his friends and investors, he is a shrewd marketer and network consumer who connects wealthy family offices with founders who need funds to expand.

Others worry that it has been at the forefront of a wave of speculative cash, giving stratospheric valuations to unproven firms.

Virgin Galactic, which helped make it public in 2019, opened the floodgates for companies that launched low-income moons through Spacs. More than 300 Spacs have raised $ 97 billion this year, according to Refinitiv.

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

From Bloomberg to Zuckerberg

Born and raised in Richmond, London, the son of a lawyer and a doctor, Osborne attended St Paul’s School, King’s College and the London School for Economics, graduated in 2005 and worked as a Bloomberg advisor. which became a thread through Osborne’s career.

Kevin Sheekey, campaign manager and longtime head of communications at Bloomberg, said Osborne began working for the then mayor of New York after co-organizing a dinner in London, which included actress Claudia Schiffer and journalist James Murdoch.

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

He describes a quality similar to Zelig 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, gaining access to people who would become his ticket to the world of technology finance.

“At first, it was like,‘ what does this twenty-year-old Briton do in the middle of U.S. politics? It didn’t make much sense, ”said Daniel Ek, founder of Spotify, who met Osborne in that period.

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

Osborne began advising and later investing in Palihapitiya’s share capital after meeting Mark Zuckerberg in 2008.

Palihapitiya described Osborne as “extremely discreet and exceptionally reliable. It is incredibly connected. It’s our modern version of a homeless billionaire. Ian works constantly, travels constantly and collects people ”.

In 2009, he set up his own consultancy, Osborne and Partners, which hired clients such as DST Global, the venture capital firm run by Yuri Milner, the Israeli-Russian billionaire.

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

During his time working with DST and beyond, Osborne continued to lead a public relations and business development consultancy, advising the companies of American tech billionaires from Travis Kalanick and Evan Spiegel to Zuckerberg. He remained close to Bloomberg, assisting in an attempt to buy the Financial Times from Pearson in 2013.

That year, he firmly established himself on the tech scene as one of the hottest party organizers in Davos: a “taxidermy” -based bash released with Napster co-founder Sean Parker and Salesforce CEO Marc Benioff .

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

Osborne became the “final co-host,” according to a person familiar with the era, who brought 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, when an Uber executive got into trouble for suggesting the company could dig up a critical journalist.

Bringing ‘IPO 2.0’ to Europe

Osborne created Hedosophia in 2012, named after the Greek gods of pleasure and wisdom, with the goal of specializing in earlier stage technology companies.

Initial sponsors included family offices such as the German Burda and funds related to Li, the Hong Kong tycoon, according to a person close to the group, who added that he now has a more institutional investor base of university endowments. public pension funds and insurance companies in the US, Japan, Canada and Sweden.

It was at a dinner in Hong Kong in early 2017 with Palihapitiya that he launched the idea of ​​a new type of Spac to give technology founders an easier public listing without the risk and regulatory baggage of a IPO traditional.

Despite being partners in the sponsoring company, the couple did not share the profits equally, people with knowledge of the situation said, with Palihapitiya making the most of the profits but also contributing more capital. Palihapitiya also coined Spac’s new term, “IPO 2.0,” which was listed on the New York Stock Exchange at its launch in 2017.

Since then, hundreds of Spacs have followed this strategy, launched by former banking executives, athletes and politicians, who want to enjoy the almost risk-free advantage of the Spac sponsors model. But even those operating in Osborne wonder if the market has now gone too far. “The bubble is definitely bursting now,” one said.

The Osborne / Palihapitiya Spac franchise has been affected as the market turned – with Clover shares falling more than 50% of its highs and Virgin Galactic shares – which has yet to make a commercial flight, to the drop more than 70% peak.

Osborne is determined to hit his European Spac right, according to those close to the plans, reducing financial rewards for the sponsor and convening a heavyweight board.

This month, he will also return to a first passion for theater, producing one of the first musicals to open after the end of the pandemic restrictions in the West End – Everyone is talking about Jamie.

He will have to get used to being the center of the stage; at least in Europe there is no Palihapitiya to hide and scrutiny over Spacs in the US has begun to raise questions for both investors and sponsors about whether the market has gone too far. , too fast.

Additional reports by Tim Bradshaw and Arash Massoudi