Key Takeaways
- • Two Sigma Ventures closed a $288 million early-stage fund (Two Sigma Ventures III, LP) with primary backing from external investors, marking a significant expansion of the venture arm of the $60 billion hedge fund Two Sigma.
- • Villi Iltchev, a Bulgarian-American investor with prior experience at Merrill Lynch, HP, Salesforce (leading investments in HubSpot, Box, Gusto, MuleSoft, and Zapier), and August Capital, joined as partner and managing director in August 2019 to lead the fund.
- • The fund targets 8-10 early-stage investments across enterprise and consumer software, AI-powered applications, infrastructure and developer tools, biotech, and healthcare sectors.
- • Two Sigma Ventures provides portfolio companies with access to a proprietary network of 1,700+ data scientists, quantitative engineers, and industry experts—a competitive advantage derived from the parent hedge fund's AI and machine learning-driven trading infrastructure.
- • The venture subsidiary has previously backed over 70 companies using $220 million in mostly internal capital since its 2012 inception, achieving six confirmed exits according to Crunchbase.
Summary
Two Sigma Ventures, the venture capital subsidiary of the prominent $60 billion hedge fund Two Sigma, has announced the close of its third fund at $288 million in committed capital, primarily sourced from external investors. The fund announcement coincides with the August 2019 arrival of Villi Iltchev, a technology-focused investor with deep corporate development and venture experience, who joined as partner and managing director.
Iltchev brings a distinguished track record across technology investment banking, corporate development, and venture capital. He began his career as a technology investment banker at Merrill Lynch before transitioning to strategic corporate development roles at HP. His tenure at Salesforce proved formative, where he led the company's investments and acquisitions team and backed several companies that achieved significant scale, including HubSpot, Box, Gusto, MuleSoft, and Zapier. Most recently, he was with August Capital, where he led investments in early-stage companies including GitLab and SendBird. Iltchev is also a personal investor in AirTable, a late-stage startup with a $1.1 billion valuation that develops spreadsheet-database hybrid products.
Two Sigma Ventures III, LP will pursue 8-10 early-stage investments with a focus on Series A rounds, supplemented by select Seed and Series B opportunities. The fund targets enterprise and consumer software, AI-powered applications, infrastructure and developer tools, biotech, and healthcare sectors. The fund's strategic positioning emphasizes data-driven founders and the application of quantitative methodologies to business problems.
A distinctive competitive advantage for Two Sigma Ventures is the parent company's extensive technical infrastructure. Two Sigma Investments operates with over 1,700 data scientists, quantitative engineers, and industry experts who are available to support portfolio company founders. This resource network, developed through the hedge fund's sophisticated AI and machine learning-driven trading operations, differentiates Two Sigma Ventures from conventional venture firms lacking this in-house expertise.
The venture subsidiary's track record since inception in 2012 includes backing over 70 companies with approximately $220 million in committed capital—predominantly from internal Two Sigma Investments funds. According to Crunchbase, the venture arm has achieved six confirmed exits to date, establishing a foundation for the new $288 million external fund.
Iltchev brings a distinguished track record across technology investment banking, corporate development, and venture capital. He began his career as a technology investment banker at Merrill Lynch before transitioning to strategic corporate development roles at HP. His tenure at Salesforce proved formative, where he led the company's investments and acquisitions team and backed several companies that achieved significant scale, including HubSpot, Box, Gusto, MuleSoft, and Zapier. Most recently, he was with August Capital, where he led investments in early-stage companies including GitLab and SendBird. Iltchev is also a personal investor in AirTable, a late-stage startup with a $1.1 billion valuation that develops spreadsheet-database hybrid products.
Two Sigma Ventures III, LP will pursue 8-10 early-stage investments with a focus on Series A rounds, supplemented by select Seed and Series B opportunities. The fund targets enterprise and consumer software, AI-powered applications, infrastructure and developer tools, biotech, and healthcare sectors. The fund's strategic positioning emphasizes data-driven founders and the application of quantitative methodologies to business problems.
A distinctive competitive advantage for Two Sigma Ventures is the parent company's extensive technical infrastructure. Two Sigma Investments operates with over 1,700 data scientists, quantitative engineers, and industry experts who are available to support portfolio company founders. This resource network, developed through the hedge fund's sophisticated AI and machine learning-driven trading operations, differentiates Two Sigma Ventures from conventional venture firms lacking this in-house expertise.
The venture subsidiary's track record since inception in 2012 includes backing over 70 companies with approximately $220 million in committed capital—predominantly from internal Two Sigma Investments funds. According to Crunchbase, the venture arm has achieved six confirmed exits to date, establishing a foundation for the new $288 million external fund.
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