Key Takeaways
- • Essence VC founder Tim Chen raised $41 million for his fourth fund, according to GeekWire, with limited partners committing before he had begun formal fundraising.
- • Chen launched Essence VC after multiple Seattle firms rejected him, and the firm now backs infrastructure startups with plans for around 40 investments from Fund IV.
- • A dozen Essence portfolio companies have been acquired, including Tabular, which sold to Databricks last year for a reported $2.2 billion.
- • Fund I was raised for $1 million on AngelList in 2019, followed by $5 million for Fund II and $27 million for Fund III.
- • LP backers reportedly include Andreessen Horowitz's Martin Casado and Cendana Capital's Michael Kim.
Summary
Tim Chen, founder of Seattle-based venture firm Essence VC, has raised $41 million for a fourth fund, according to GeekWire. Six years ago, Chen, a University of Washington graduate and former infrastructure engineer who had just sold a startup, was turned down by several Seattle firms. In his account to GeekWire, he said he was told he was "too technical" and "too nerdy," and so he launched his own firm.
The firm's trajectory has been rapid. Chen raised $1 million for his first fund in 2019 through AngelList, focusing on developer tools and infrastructure. He subsequently raised $5 million for Fund II and $27 million for Fund III. For Fund IV, limited partners reportedly committed before Chen began formal fundraising. "I had no deck, no memo — I hadn't even started raising," Chen told GeekWire. "The LPs just all came in." Reported LPs include institutional investors such as Andreessen Horowitz's Martin Casado and Cendana Capital's Michael Kim. TechCrunch described Chen as "one of the most sought-after solo investors."
A dozen Essence portfolio companies have been acquired, including Tabular, a data management startup that sold to Databricks last year for a reported $2.2 billion. Essence plans to make around 40 investments from its fourth fund.
Chen's background includes computer science studies at the UW, roles at Microsoft and VMware, a hand in launching open-source cloud startup Mesosphere, and the founding of Hyperpilot, an AIOps company later acquired by Cloudera. He positions his engineering background as an edge in evaluating AI-era startups, saying it allows faster decisions and earns founder respect. Jordan Tigani, CEO of MotherDuck, said Chen "asked the hardest, most interesting questions" about execution. Patrick Thompson, who has raised from Chen for Iteratively and Clarify, described him as technically minded and easy to work with.
Chen plans to remain in Seattle, where he has lived since high school, and he believes the city's tech scene is under-networked but rich in engineering talent. He said he is meeting technical people in the area, including UW PhDs.
The firm's trajectory has been rapid. Chen raised $1 million for his first fund in 2019 through AngelList, focusing on developer tools and infrastructure. He subsequently raised $5 million for Fund II and $27 million for Fund III. For Fund IV, limited partners reportedly committed before Chen began formal fundraising. "I had no deck, no memo — I hadn't even started raising," Chen told GeekWire. "The LPs just all came in." Reported LPs include institutional investors such as Andreessen Horowitz's Martin Casado and Cendana Capital's Michael Kim. TechCrunch described Chen as "one of the most sought-after solo investors."
A dozen Essence portfolio companies have been acquired, including Tabular, a data management startup that sold to Databricks last year for a reported $2.2 billion. Essence plans to make around 40 investments from its fourth fund.
Chen's background includes computer science studies at the UW, roles at Microsoft and VMware, a hand in launching open-source cloud startup Mesosphere, and the founding of Hyperpilot, an AIOps company later acquired by Cloudera. He positions his engineering background as an edge in evaluating AI-era startups, saying it allows faster decisions and earns founder respect. Jordan Tigani, CEO of MotherDuck, said Chen "asked the hardest, most interesting questions" about execution. Patrick Thompson, who has raised from Chen for Iteratively and Clarify, described him as technically minded and easy to work with.
Chen plans to remain in Seattle, where he has lived since high school, and he believes the city's tech scene is under-networked but rich in engineering talent. He said he is meeting technical people in the area, including UW PhDs.
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