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AngelList’s Diversified Evolution: From Startup Matchmaker to Private Equity Player
AngelList, known for connecting founders with early-stage investors, is taking a significant leap into the private equity domain. To initiate this expansion, the company has acquired Nova, a Y Combinator-backed fintech startup in the institutional private funds industry.
AngelList, founded in 2010 as a mailing list for angel investors, has evolved into a powerhouse fundraising channel for early-stage startups. Over the years, it has transformed its model to encompass a broader range of products and services for venture firms, investors, startups, and fund managers, making it a comprehensive platform for the entire venture and startup ecosystem.
Strategic Expansion into Private Equity
The decision to venture into private equity might seem divergent from AngelList’s original focus on early-stage startups. However, CEO Avlok Kohli, who assumed leadership in 2019, believes this expansion is a natural progression for the company.
According to Kohli, AngelList’s mission is to build the infrastructure that powers the entire startup economy, including the tools needed to run venture funds effectively. As startups mature, they seek capital from various sources, including private equity, making it a logical step for AngelList to cater to startups throughout their journey.
The Acquisition of Nova: A Gateway to the Private Markets Industry
AngelList’s mid-June acquisition of Nova marks only its second buy since inception. Nova, a fintech startup established by Pradyuman Vig in Austin, streamlines investor management processes for institutional private funds through its investor management software.
The platform aims to replace traditional subscription paperwork with flexible digital workflows, saving time and reducing friction for investors. Nova has already amassed an impressive clientele, including prominent players like Van Eck, Pantera, Broad Street Global, Galaxy, and BlockTower, managing billions of dollars in assets.
Integration and Product Rebranding
Nova will continue to operate as a business unit within AngelList, bolstering its Investor Management suite of products. The acquired startup’s digital subscriptions offering will be rebranded as AngelList Transact, while its data room and investor portal will be transformed into new AngelList products. The integration of Nova’s offerings complements AngelList’s existing suite of services, making it more competitive in serving larger institutional funds, particularly in the private equity space.
Impressive Growth and Market Consolidation
AngelList has experienced remarkable growth over the years. In 2022, assets supported for investors on the platform increased by 50% to $15 billion year-over-year. The number of startups funded on AngelList rose by 21% to 8,300, while the number of fund managers increased by 19%. With its diversified business model and significant scale, AngelList is in a strong position to consolidate the market. The company’s revenue is sourced from multiple streams, including subscription and SaaS fees, as well as carried interest.
Looking Ahead: A Dynamic Player in the Startup Ecosystem
While AngelList currently has no immediate plans for further acquisitions, it remains open to opportunities that align with its vision. With 130 employees and a range of products and services, including Treasury, Projector, and Relay, the company is solidifying its position as a dynamic player in the startup and private equity ecosystems. As it integrates Nova and expands its presence in the private markets industry, AngelList aims to continue supporting startups throughout their lifecycle, from early-stage funding to private equity and beyond.