- Vy Capital, a low-profile venture firm led by John Hering and Alexander Tamas, has built a roughly 3.4% stake in SpaceX worth about $40 billion, making it the company’s fifth-largest shareholder according to Bloomberg data — ahead of disclosed holdings from Sequoia Capital and Andreessen Horowitz.
- Vy first invested in SpaceX in 2016 at a $15 billion valuation, including more than $100 million shortly after a Falcon 9 launch failure that year. The position has compounded through SpaceX’s 2026 IPO at roughly a $1.75 trillion valuation.
- Vy’s reach extends across Musk’s companies: it is the largest outside investor in both The Boring Company and Neuralink, committed $700 million to the 2022 Twitter acquisition, and just invested in a $3 billion Boring Company raise at a $23 billion valuation. Former Vy investors and staff have also held roles at xAI.
- The firm’s assets under management rose from $27 billion at the end of last year to $50 billion in June, run by roughly two dozen employees. An investor letter cited a 41% gross internal rate of return since founding in 2014, and Vy closed to new outside capital last year.
What Happened?
Vy’s investor letter stated the firm’s underwriting case directly: it believes SpaceX will exceed a $10 trillion valuation within five to seven years and views Musk as “the greatest engineer and entrepreneur in history.” Hering’s relationship with Musk goes well beyond capital — he devoted years to Starlink’s early buildout, has held a SpaceX employee badge, and now sits on The Boring Company’s board. Washington University in St Louis, a Vy investor, said more than a fifth of its endowment is now in SpaceX through the fund, calling Vy its best-performing manager in history. Vy has also backed Reddit, Zomato, Upgrade and Urban Company, with Reddit CEO Steve Huffman describing Vy’s 2017 investment as the easiest deal he’s done because the firm had already done all the diligence work.
Why It Matters?
What makes this notable isn’t the return, it’s the concentration and access. A 24-person firm holding a larger disclosed SpaceX stake than Sequoia or a16z, with board seats and personal proximity to Musk across five separate companies, represents a kind of position that institutional allocators generally can’t replicate — it was built through years of unglamorous operational involvement (recruiting for Starlink, financial modeling, being on call) rather than capital alone. For LPs, the appeal is straightforward: a 41% gross IRR since 2014 and a third fund with nearly 60% net IRR would place Vy among the best-performing venture vehicles by PitchBook’s benchmarks. The risk is equally straightforward and rarely stated as plainly as Vy’s own letter states it — the fund’s outcome is a bet on one person’s continued execution across an unusually broad set of ventures, from rockets to tunnels to brain implants, with limited diversification if that thesis breaks.
What’s Next?
Vy’s newest move is instructive: an investor, David Larar, is co-founding the American Strategic Technology Fund, which just co-led a $250 million round in Vy-backed drone maker Neros Technologies alongside Sequoia, with Hering making a $100 million anchor commitment. That signals Vy’s network is beginning to spawn adjacent vehicles rather than staying contained to the core fund. Watch SpaceX’s post-IPO trading and valuation trajectory as the most direct read on whether Vy’s $10 trillion, five-to-seven-year thesis is tracking — and watch whether other closely-held Musk-adjacent stakes, at Valor Equity or Founders Fund, see similar disclosure as more of these companies go public.
Source: Financial Times
