Jack Abraham has a lot of confidence in what he is building. Again, you can not be unfair or insecure about yourself if you only invest in your own startups as an investor, which is exactly the model that Abrahams San Francisco-based venture studio, Atom, has followed since its launch nine years ago.
It all started with $ 10 million, mainly Abraham’s own money, capital he raised by selling his first startup, a local shopping engine called Milo, to eBay in 2010 for $ 75 million. Abraham had left Wharton as a $ 500,000 undergraduate from a professor who believed that Abraham – whose father founded ComScore – would himself be a corporate construction machine.
The professor had good instincts. After selling Milo at the age of 24, Abraham spent more than three years building products on eBay and learning to lead several teams before he started looking outside, making angel games, including on Uber and Pinterest, and, he says, spreading around some of his ideas. (Among these, he says, “he invented postmates. I literally gave the founders the idea for the company. They were working at a B2B company at the time. I was there quite early; it helped create the whole food delivery business.”)
He had so many ideas – hundreds, he says – that not long after he created Atomic, later passed on to the founding team Andrew Dudum, a Wharton comrade who is also the son of entrepreneurs and who also dropped out of college to join the starting world. (Dudum’s first stop was a beginning start supported by Sequoia Capital.)
Atomic first worked for a company. The following year, it worked on two. In 2018, the equipment had expanded a team that could handle many of the back-end functions that startups need to thrive, from recruitment to accounting, and launched 10 companies. Impressed investors gave the company $ 150 million to create even more startups.
By then, Abraham and Dudum had brought in two other public partners: Chester Ng and Andrew Salamon. Salamon did not stay long, eventually starting his own venture studio, Material, with founder Matt Salzberg from Blue Apron 2019. The same year JD Ross, one of a handful of founders of recently public the company Opendoor, joined Atomic as a general partner.
The company has gained momentum since then. In fact, Atomic has now created “dozens” of startups – including about one per month last year, says Abraham. It also closed only $ 260 million in new capital commitments, including from a prominent university that now serves as its anchor investor but prefers not to be appointed publicly.
Referring to the “proprietary aspects” of the model, Abraham refuses to explain how Atomic’s finances work, except to admit that it operates in “more of a fund context instead of a holding company” where investors would essentially buy shares in Atomic itself.
Of course, it is easy to appreciate the enthusiasm of Atomic’s investors, including early supporters such as Peter Thiel and Marc Andreessen. Abraham and Dudum are both convincing narrators, whom we have witnessed primarily in interviews with them at various times. The company is also starting to see some exits.
One of Atomic’s creations, the telecommunications health company Hims, was published in January through a blank check company in a deal that valued the company at $ 1.6 billion, and its shares have risen since then. At the time of writing, the three-and-a-half-year-old outfit – run by Dudum, who serves as dual CEO of Hims and a general partner of Atomic – has a market value of $ 2.9 billion.
Atomic also sold a voice-driven sales startup, TalkIQ, to the company Dialpad 2018 for what Forbes reported at the time to be a “just under $ 50 million. “TalkIQ had raised a total of $ 22 million.
More exits will come, Abraham suggests. “There are many companies we have that are now approaching the type of growth and driving speed where they have the ability to be listed, even next year,” he says.
One of these possible future prospects is Replicant, an autonomous start-up of call centers that has raised $ 35 million since its founding in 2017, including one Series A round of 27 million dollars was led by Norwest Venture Partners back in September. Another Atomic launch, Homebound, a three-year-old home-building suit that handles everything from financing to construction, has also had little speed, as well as attracting $ 53 million from investors.
Although Atomic is proud to “pressure test” its ideas, not every start has been a hit with users. A photo sharing app called Ever was shut down shortly after NBC reported that the images shared by people were used to train a face recognition system – technology that the company offered to sell to private companies, law enforcement and the military. (Has ever been transformed into the corporation Paravision.) A sleep tracking specialist, Rested, who Salamon was driving was also shut down.
Meanwhile, ZenReach, a Wi-Fi marketing company that has gathered at least $ 94 million from investors through 2018, dismissed 20% of its employees in the same year. A CEO who had been taken on board by Abraham and who had previously been an operational partner with Atomic has since moved on to a role outside Atomic’s sphere.
Unless all its ideas set the world on fire, Atomic has no shortage of others.
When asked about some of the areas where he sees the greatest opportunity for renewal, Abraham quickly marks “healthcare, finance, education, real estate and other large industries where you truly understand how broken they are, and they are broken up and down the whole stack.
“You study them,” he says, “and then you wonder how this is possible.”