QED Investors said Tuesday it has wrapped up two oversubscribed funds totaling $1.05 billion.
The combined fund, billed as the Alexandria venture capital firm’s seventh overall, is made up of a $550 million early-stage fund and a $500 million growth-stage fund. QED said the money will be used to fund fintech companies around the world.
Founded by Capital One Financial Corp. co-founder Nigel Morris and one of its earliest analysts, Frank Rotman, QED has focused exclusively on fintech companies since its start in 2007. In a statement, Morris said consumers, businesses and financial institutions are coming around on fintech. “We’re seeing positively selected inbound deal flow on a massive scale now from pre-seed to growth-stage companies,” he said.
The new fund follows a $350 million tranche the firm, which employs 17 investment professionals, closed in 2020 just weeks before the start of the Covid-19 pandemic. To date, QED said it has invested in more than 150 companies — including 20 “unicorns,” a name for companies valued at more than $1 billion — and has more than $3 billion under management.
Some notable investments include Credit Karma, which sold to Intuit Inc. for $8.1 billion in 2020, as well as peer-to-peer student loan marketplace SoFi Inc. and single-family investing marketplace Roofstock Inc.
Locally, QED has incubated auto-refinancing startup MotoRefi, which closed on its largest-ever funding round this past May, as well as invested in education company 2U Inc., advertising startup AddThis Inc. and reverse logistics company Optoro Inc. before exiting.
Morris had talked to the Washington Business Journal in January, sharing his bullishness for 2021 and heralding some big boons for the fintech industry, which he described as "coming of age," in part because of the financial needs and gaps made so apparent by the Covid-19 pandemic. “The rate of change is much faster than people imagined," he said at the time. "And Covid has been a catalyst.”
Related: Read Nigel Morris' interview with the Washington Business Journal.
