Destiny Tech100 Fund Offers Public Access to Private Tech Start-Ups
Stripe, a payments start-up, is one of the most successful companies to emerge from Silicon Valley in a generation, with a valuation of $65 billion. However, for the past 15 years, most individuals have not had a way to invest in it or other private tech companies like SpaceX, OpenAI, Discord, and Epic Games.
A new fund, Destiny Tech100, is aiming to change that by offering a publicly traded fund that includes shares of 23 private tech companies, with plans to expand to 100 start-ups. The fund, which began trading on the New York Stock Exchange last week, is part of a growing trend of convergence between public and private markets.
Sohail Prasad, the CEO of Destiny XYZ, the parent company of the fund, stated that the goal is to allow anyone to own part of the tech industry’s top private companies. “We have tens of thousands of individual investors that are now shareholders in these companies,” he said.
The fund, with a market valuation of about $365 million, has raised $100 million in funding from investors including founders of Coinbase, Quora, and FIGS. It charges an annual fee of 2.5 percent and plans to hold stocks for a time after a company goes public.
James Seyffart, a research analyst at Bloomberg Intelligence, noted that such a fund provides a way for many investors to access these companies, especially with smaller amounts of money. However, he also highlighted the risk involved in investing in private tech start-ups, as they can be volatile and challenging to evaluate.
The Destiny Tech100 fund comes at a time when investors are reevaluating their tech investments, with some well-known companies like Instacart and Reddit trading below their last private valuations. Despite the risks, the fund offers a unique opportunity for individuals to participate in the growth of private tech companies that were previously out of reach.
