Defy Partners raises $262M to close the Series A gap

Defy Partners, a Silicon Valley investment firm launched in 2017 by a pair of seasoned venture capitalists, has secured $262 million for its sophomore fund.

The firm leads investments in Series A startups, providing between $3 million and $10 million depending on the status of the business. To provide its portfolio companies additional follow-on capital, Defy has raised a significantly larger fund than its debut effort, which brought in $151 million two years ago.

Alongside the new capital, Defy has added to the mix two venture partners, or “Sages” as they are calling them. Otherwise, Defy co-founders Trae Vassallo and Neil Sequeira tell TechCrunch, their strategy remains the same.

“Raising the next round of financing is hopefully something we can be helpful with,” Sequeira told TechCrunch. “That’s always been expected from venture partners but it’s not everything, it’s what a good venture person can help you with besides just money that matters. Sophisticated entrepreneurs know it’s about more than just money.”

Sequeira previously spent more than 13 years as a managing director at General Catalyst before joining forces with Vassallo, who had herself spent 12 years as a general partner at Kleiner Perkins. The two were well-known in the Valley for a slew of high-profile investments, including Bustle and The Honest Company for Sequeira and Dropcam and Nest for Vassallo.

“Neil and I from the beginning had a shared set of values and a vision,” Vassallo told TechCrunch. “What has been so valuable is that the two of us have completely different networks. We’ve found that while it’s a small industry, our different experiences have made us so much more valuable to our entrepreneurs.”

Vassallo and Sequeira say the proliferation of seed funds made them realize the need for additional Series A funds. So they left behind the Silicon Valley institutions that are Kleiner Perkins and General Catalyst to support early-stage founders and connect on a more intimate level.

“It’s really fun to be an entrepreneur again,” said Vassallo, who co-founded Good Technology in 2000. “When you’re an entrepreneur, you have to figure out absolutely everything: What kind of culture you want to build, how you’re going to work together as a team, how you want to grow or not grow as you move forward. That’s been the fun part. It gives us incredible empathy with the entrepreneurs we are working with on a regular basis.”

Defy has deployed capital to a mix of enterprise and consumer companies to date, including Owl, which sells security cameras for vehicles; cloud security compliance platform Shujinko; and Securly, a tool meant to help kids stay safe on their devices.

Brian Lee and Sujal Patel joined Defy earlier this month as part of its new Sage program. Lee co-founded The Honest Company, ShoeDazzle and LegalZoom, while Patel co-founded Isilon Systems. The pair, who are longtime friends of the firm, will seek new investments, take board seats and work with existing portfolio companies.