PALIHAPITIYA
Chamath

• 1. Early life and education
• 2. Career
• 2.1. 2004–2011: Silicon Valley and Facebook
• 2.2. 2011–present: Social Capital
• 2.3. Transition to Single GP Technology Holding Company
• 2.4. SPAC platform

Chamath Palihapitiya is a Sri Lankan-born Canadian and American venture capitalist, engineer, SPAC sponsor, founder and CEO of Social Capital. Palihapitiya was an early senior executive at Facebook, working at the company from 2007 to 2011. Following his departure from Facebook, Palihapitiya started his fund, The Social+Capital Partnership, through which he invested in several companies, including Yammer and Slack. The Social+Capital Partnership changed its name to Social Capital in 2015. He is a co-host of technology podcast All In. With an estimated net worth of around US$1.2 billion as of April 2021, Palihapitiya is ranked 2,378th in the Forbes list on Billionaires 2021.

Early life and education

Palihapitiya was born on 3 September 1976 in Sri Lanka to Sri Lankan parents. Palihapitiya moved with his family to Canada at age five; his father Gamage had been posted to the High Commission of Sri Lanka, Ottawa. Five years later, in 1986, the posting came to an end – rather than returning home the family applied for refugee status, on the basis that Gamage had been criticized for his views on the violence during the Sri Lankan Civil War.

Palihapitiya's father was frequently unemployed, and his mother did low-paying housekeeping jobs. Palihapitiya worked at a Burger King to make ends meet. He attended Lisgar Collegiate Institute and graduated at the age of 17.

After graduating from the University of Waterloo in 1999 with a degree in electrical engineering, Palihapitiya worked for a year as a derivatives trader at the investment bank BMO Nesbitt Burns. He then accepted a job offer at Winamp and moved to California.

Career

2004–2011: Silicon Valley and Facebook

Palihapitiya joined AOL, becoming the company's youngest vice president ever, heading its instant messaging division in 2004. In 2005, he left AOL and joined Mayfield Fund; a few months later he left that job and joined Facebook, which was then a little more than a year old. Palihapitiya's work at Facebook centered on user growth and four years after joining, Facebook hit 1B in users.

Steven Levy wrote in Facebook: The Inside Story that Palihapitiya was regarded as a "bully" at Facebook, and that he had made many of his subordinates cry regularly.

2011–present: Social Capital

In 2011, he left Facebook and started his own fund, The Social+Capital Partnership, with his then-wife. The firm changed its name to Social Capital in 2015. Through the fund, Palihapitiya invested in a number of companies, including Glooko, Inc, Yammer, SecondMarket, Slack, and Box. As of 2015, the fund had more than $1.1 billion in total assets most of which came from external investors (i.e. LPs).

In 2018, there was a massive decrease in Social Capital fund's operations and a significant exodus of top management and co-founders. Axios reported that Palihapitiya was spending a significant amount of time with his new girlfriend in Italy and rarely showed up to the office or answered emails from employees. The firm returned investor capital and converted into a family office although continued to manage some external capital on a no-fee basis.

In December 2019 Palihapitiya stepped down as a member of the board of directors of Slack.

Transition to Single GP Technology Holding Company

After transitioning to a single GP firm, essentially Palihapitiya’s family office, in 2018, Palihapitiya said he wanted to return to first principles and restructure the firm to better align with the long-term interests of entrepreneurs, not just limited partners (LPs).

Since then, Social Capital has made investments in three areas: climate science, life sciences and biotechnology, and the decentralization of the digital economy through platforms such as crypto, blockchain and digital assets, or what is referred to as web3. Palihapitiya manages from a balance sheet of permanent capital.

SPAC platform

Palihapitiya previously said that he reserved symbols all the way from IPOA through IPOZ.

In 2019, Palihapitiya helped take Virgin Galactic public through a SPAC, previously known as IPOA.

In March 2021 Palihapitiya sold his personal stake Virgin Galactic for around US$213 million. In February 2022, Palihapitiya stepped down as chairman of Virgin Galactic.

In 2020, Social Capital Hedosophia took Opendoor, an online real estate marketplace, public through a SPAC. OpenDoor raised $1 billion through the merger, $400 million of which came from the SPAC and an additional $600 million through PIPE investors. Palihapitiya accounted for $100 million of the PIPE.

In 2021, Palihapitiya announced he planned to help take SoFi, a financial services platform, and Clover Health, a Medicare insurance company, public through SPACs. This gained Palihapitiya criticism from the Financial Times, which said that he is "shilling risky reverse-mergers to retail investors on a almost bimonthly basis".

Following the Clover Health SPAC, Hindenburg Research, a financial analyst and short-selling specialist firm, issued a report about this transaction accusing Palihapitiya of luring investors into a “broken business”, argumenting that he failed to inform them about an active Department of Justice investigation into Clover’s alleged deceptive business practices. Palihapitiya made more than $290 million from the deal based on a $25k investment. In addition the Clover Health co-founder/CEO's previous company, CarePoint Health, a hospital conglomerate in New Jersey, was accused of price gouging customers and according to a NJ state commission siphoning off $150 million to himself and his friends bankrupting the company and causing a hospital crisis in NJ. Regulators in NJ called for an investigation of Clover Health because of the CEO's previous actions. The Securities and Exchange Commission opened an investigation into the allegations set forth in the Hindenburg Research report on February 4.

During the GameStop short squeeze, Palihapitiya repeatedly attacked Robinhood and its founders for being unethical by selling payment for order flow to HFT firms like Citadel Securities and pushed his fans to switch over to SoFi, which was merging with his SPAC yet failed to mention that SoFi employs the same practice of selling payment for order flow to HFT firms (including to Citadel Securities) and owns a 16% stake in Apex Clearing Corp, a clearing house involved in the controversy.

Coates clarified that a judge could rule a SPAC is similar enough to an IPO that the lesser securities law liability would be void.

In June 2021, Social Capital Survetta filed for four new SPACs which would focus on biotechnology companies, under the stock tickers DNAA through DNAD.