Chamath Palihapitiya: Not a Slacker
By: Koby Rosinsky, Senior Editor
If you keep up to date with business news, chances are you’ve heard the name Chamath Palihapitiya. Chamath Palihapitiya is many things: a venture capitalist and visionary, part-owner of the Golden State Warriors, and a leader in the field of Special Purpose Acquisition Companies (SPACs). His firm, Social Capital, closed to outside capital since 2018 continues to work with many leading startups. Palihapitiya also stays very involved in current events, just two weeks ago publishing a letter in which he called out the United States’ dependence on foreign oil sources and proposing a turn to solar as an alternative.
Originally from Sri Lanka, Palihapitiya emigrated to Canada at a young age, where his father was serving in a diplomatic capacity. His father later applied for refugee status to remain in Canada. Growing up in Canada, Palihapitiya was very poor, but despite that, he managed to attend the University of Waterloo, and receive a degree in electrical engineering. After graduating, he worked at AOL and rose to become the youngest Vice President in the company’s history. He quickly got his start in venture capital at Mayfield Venture Capital fund, where he worked for about a year before switching to Facebook, now called Meta. Palihapitiya held a senior role and was considered an instrumental part of Facebook’s success. In 2011, he left Facebook to start Social Capital, originally Social+Capital Partnership, his own VC fund.
Since then, Palihapitiya has been a major player in the field of venture capital. One company he spearheaded was Slack. Slack is an internal communications program aiming to improve workplace communication, which quickly became very popular among businesses. Palihapitiya helped bring Slack public, and, in June of 2019, Slack started trading under the ticker WORK. In July 2021, Slack was acquired by Salesforce for over $27 billion.
Palihapitiya is also well known for his many SPACs, which are essentially just shell companies that investors can put money into for the sole purpose of acquiring a private company in the future. This allows a private company to go public faster, easier, and with less SEC scrutiny than it would with a traditional IPO. SPACs have been in the news over the past year, as there were over 600 in 2021, including Lucid Motor’s, which raised over $4 billion and briefly reached a market cap of $90 billion. Palihapitiya led several SPACs, including Virgin Galactic and Clover Health. Virgin Galactic is a space tourism company founded by Richard Branson, with a current market cap of around $2.5 billion. Clover Health provides Medicare insurance plans to consumers, with a current market cap of around $1.6 billion.
When Palihapitiya first closed Social Capital to new investors, he released a statement saying that the firm had been drawn away from its long-term goals and was looking for ways to return to them. Just weeks ago, he published a letter in which he called out the U.S. dependency on foreign oil as well as the environmental impact it has. In his letter, he proposed solar energy and batteries as a potential solution. It is worth noting that this letter was written by Chris Kemper, the CEO of Palmetto, a clean energy solutions company with a focus on solar energy and making the installation process for solar panels across the country easier. Social Capital recently led a $375 million funding round for Palmetto. Social Capital put in $220 million, making it their largest single investment into a company. This recent round values Palmetto at north of $1 billion. Depending on how long oil stays at its current price, Palmetto could be positioned to go through a period of intensive growth. As of now, only 4% of U.S. homes have solar panels, meaning there is plenty of room for market growth, and it seems likely that this is Palihapitiya’s next big project.