Peter Thiel is having a good month.
According to a new SEC filing, low-flying Mithril Capital Management, which Thiel co-founded with longtime colleague Ajay Royan in 2012, is out raising its second fund with a $600 million target. Sources say the fund is already oversubscribed, however, and that it may hit $1 billion before it holds a final close.
Emails and a call to the firm were not returned this afternoon.
The vehicle marks the second giant fund that involves Thiel in one week’s time. Last Friday, Founders Fund, the early-stage venture firm he co-founded in 2005, closed its sixth fund with $1.3 billion.
There’s seemingly no end to LPs’ appetite for anything involving Thiel, though it’s also worth noting that aside from his involvement, the firms don’t feature much overlap.
This reporter sat down with Royan in 2014 to discuss Mithril, which is named after a fictional metal from J. R. R. Tolkien’s fantasy writings. The way he explained its focus then was as a growth-stage fund, one focuses on established companies that are leveraging tech in some way but are not necessarily tech companies. (He compared it, in fact, to a young General Atlantic.)
Though Mithril has backed some tech companies, including the cloud service marketplace AppDirect; Classy, which provides online fund-raising services for nonprofits; and the data analysis giant Palantir (which is one of Founders Funds’ biggest bets to date), it has numerous bets that better underscore its mandate, including to fund companies too mature for many VCs yet that don’t fit the mold of a private equity investment, either.
Among them is C2FO, an eight-year-old, Kansas City-based collaborative cash-flow optimization company that tries unlocking capital trapped in trade relationships; Adimab, a nine-year-old, New Hampshire-based antibody drug discovery startup that Wired covered at length recently; and a nine-year-old, Redwood City, Calif.-based surgical robotics company called Auris.
The firm’s funds also have a slightly longer life than most investor funds, whose investing period ends after 10 years. As Royan told me of Mithril’s $540 million debut fund and an LP source tells me now of this second vehicle, both pools have a 12-year-long investing period so that Thiel and Royan can make longer-term bets in companies that aren’t necessarily about to go public or otherwise exit.
The firm’s bets tend to be fairly concentrated, too. Its debut fund has been used to back just 17 portfolio companies. Royan, who runs Mithril’s day-to-day operations, said during that 2014 sit-down that the firm has at least $100 million riding on one of its portfolio companies. (He wouldn’t disclose which one, though we’ve always suspected Palantir, given the stunning amounts of money it has raised over the years.)
An LP says that roughly 80 percent of its capital is tied up in another six to eight companies, including Adimab, AppDirect, Auris, and Fractyl Labs, a company aiming to better control type 2 diabetes through a device that changes the physiology of the gut.
In fact, Mithril — which employs around 10 people but counts Thiel and Royan alone on its investment committee — has seen numerous of its deals attract substantial follow-on funding, including from J.P. Morgan and Tiger Global Management. It hasn’t exited from any of them yet.