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Chamath Palihapitiya’s venture capital group Social Capital has fired two of its most senior partners and hired a law firm to investigate an undisclosed “situation” related to its investment in Groq, an artificial intelligence chips start-up.
In a letter to investors sent this week, Social Capital said it had fired Jay Zaveri, its head of early-stage and venture investing who had been a partner since 2015, and Ravi Tanuku, who had been head of public markets and M&A since 2020.
The letter, which was described to the Financial Times, said Social Capital had retained law firm Wachtell Lipton to investigate a “situation” it had become aware of last Tuesday, although it did not provide further information. It also said the company was working with the heads of its portfolio companies on whose boards Zaveri sat to ensure an orderly transition.
Social Capital said in a statement: “We have terminated the employment of two of our employees due to employee-specific circumstances. We have no further comments at this time.” Bloomberg first reported the news that the partners had been fired.
Zaveri and Tanuku did not immediately respond to a request for comment. Social Capital declined to comment further, and Groq could not immediately be reached for comment.
The development relates to Social Capital’s investment in Groq, according to two people with knowledge of the situation.
Social Capital backed the Silicon Valley company in 2017 and 2018, including investing $52.3mn in a $60mn convertible note. Groq has since boomed in value, raising $300mn in 2021 in a round led by Tiger Global Management and D1 Capital that valued it at more than $1bn.
The people with knowledge of the matter said the two partners had recently marketed a special purpose vehicle set up to sell an allocation in the convertible note fundraising.
Social Capital has had a volatile few years under the control of its founder, former Facebook executive and “Spac king” Palihapitiya, who was one of the most vocal promoters of the wave of blank-cheque companies that launched between 2020 and 2022.
He launched the fund in 2011, raising $1bn and making early investments in companies, including Slack. He slimmed it down in 2017 after a series of high-profile exits, effectively turning it into a family office. He attempted to raise a new fund from external backers in 2022 but abandoned the plan earlier this year.