Chamath Palihapitiya: From Facebook to SPAC King

Chamath Palihapitiya is a Sri Lankan-born Canadian Silicon Valley entrepreneur and venture capitalist. He worked as a senior executive at Facebook from 2007 to 2011, after which he founded Social Capital. He is also one of the hosts of the tech podcast All-in with David Friedberg, David Sacks, and Jason Calacanis.    

Chamath Palihapitiya - Biography

Chamath Palihapitiya - Early Life and Education
Chamath Palihapitiya - Career Highlights
Chamath Palihapitiya - Investment 
Chamath Palihapitiya - Philanthropy
Chamath Palihapitiya - Political Role 
Chamath Palihapitiya- Personal Life
Chamath Palihapitiya - Facts

Chamath Palihapitiya - Early Life and Education

Chamath was born in Galle, Sri Lanka, but moved to Canada at 5 years of age when his father was posted at the Sri Lankan High Commission in Ottawa. When his father’s diplomatic posting ended in 1986, his family sought asylum in Canada due to his father’s political stand against the violence against Tamils during the Sri Lankan Civil War. 

He grew up in difficult economic circumstances, as his father struggled with unemployment and alcoholism. His mother supported the family by working housekeeping jobs. From 14 years of age, Chamath worked at Burger King to support his family. While working, he attended the Lisgar Collegiate Institute and later completed his degree in Electrical Engineering from the University of Waterloo. 

Chamath Palihapitiya - Career Highlights

Beginning his career in - 2004-2011 - Winamp, AOL, Mayfield, and Facebook

Chamath started his tech career with Winamp, which was later acquired by AOL. He became the youngest VP and headed its instant messaging division in 2004. In 2005, he left AOL and joined Mayfield Fund. But in 2007, he left Mayfield and later joined Facebook. 

At Facebook, his first year was very tumultuous. He led the release of Facebook Beacon, the advertising system that failed. It soon became the subject of multiple lawsuits. His next focus was on new user growth, and after four years, Facebook reached 1 billion users. He then led Facebook Home and Facebook Phone projects and soon left. 

Facebook Success Story - How is it Ruling the Social Media?

Facebook is an American online social networking website owned by Meta Platforms. Know more about its business model, revenue model, growth and more.

StartupTalkySarika Anand

2011 - Social Capital Partnership 

In 2011, he left Facebook and started the Social Capital Partnership with his wife, Brigette Lau. In 2015 he later changed the company name to Social Capital. Chamath invested the funds in a number of companies, such as Yammer, Glooko, Inc., Box, SecondMarket, and Slack. In 2015, Social Capital had more than $1.1 billion in assets from external investors. 

In 2018, Social Capital saw a decrease in funding operations and a significant change in top management and co-founders. Axios reported that Chamath spent more time on his new girlfriend in Europe rather than showing up to the office or answering emails. The firm then returned to investor capital and converted it into a family office. In 2019, Chamath stepped down as a Board Member of Slack. 

Transitioning to single-GP technology holding company   

In 2018, Chamath transitioned Social Capital to a single GP firm and commented that he wanted to return to his first principles and restructure the firm to align it better with the long-term goals of entrepreneurs. 

After that, Social Capital has made investments in three main areas: life sciences, climate science, and biotech. It also invested in the decentralization of the digital economy through platforms such as digital assets, blockchain, and crypto. 

The SPAC Platform

In 2019, Chamath helped make Virgin Galactic go public via a Special Purpose Acquisition Company (SPAC). But in 2021, he sold the stakes in the company for around $213 million and in 2022, he stepped down as the Chairman of the company. 

In 2020, the brand took over Opendor, an online real estate marketplace, and made it public via SPAC. The brand raised over $1 billion through a merger - over $400 million came directly from SPAC, and the other $600 million through PIPE investors. Chamath himself put in $100 million. 

In 2021, he planned to take over SoFi, a financial service platform, and Clover Health, a Medicare insurance brand. But both takeovers received heavy criticism from the Financial Times who commented that he is ‘shilling risky reverse-mergers to retail investors on an almost bimonthly basis’. 

After the Clover Health merger, Hindenburg Research issued a report accusing Chamath of luring investors into broken businesses and argued that he deceived them into investing in failed businesses. In the Clover Health merger, Chamath made over $290 million based on a simple 25K investment. Also, the Clover Health CEO’s previous organization, CarePoint Health, was accused of price gouging clients. 

As per the New Jersey commission, he siphoned off over $150 million for himself and his friends. This caused the company to go into bankruptcy and caused a major hospital crisis in New Jersey. Based on this research, the Securities and Exchange Commission opened an investigation on 4th February. 

In the GameStop short squeeze, Chamath called out Robinhood and its founders as unethical because they sold payment for order flow to HFT firms like Citadel Securities and made his fans switch over to SoFi. SoFi was merging with his SPAC but he failed to mention that the brand employed the same practice of order flow to HFT firms. 

In 2021, Social Capital filed four new SPACs that focused more on biotechnology companies under the stock tickers DNAA through DNAD. In 2020, the brand acquired the texting app Hustle, with Chamath taking over as the CEO in 2023.    

The acting director of the SEC’s Corporate finance division, John Coates, criticized Chamath for his views on the benefits of SPACs over traditional IPOs. Coates commented that a judge could rule a SPAC similar to an IPO, something that Chamath promised could be avoided. 

Chamath Palihapitiya - Investment 

When working for Facebook, Chamath invested in multiple start-ups through the venture capital fund company Embarcadero Ventures. In 2010, he helped buy the Golden State Warriors for $450 million and is a board member for the team. In 2022, his 10% stake brought him a 2000% return - over $520 million from just a $25 million investment. 

Chamath Palihapitiya - Philanthropy

Chamath donated over $25 million to his alma mater, the University of Waterloo, for the engineering department in 2018. In 2021, he donated over $7 million to offer clean drinking water to over 1000 families in California’s Central Valley through the partnership with One2One and Source Global. 

Chamath Palihapitiya - Political Role 

Chamath was initially a supporter of the Democratic Party and donated over $1.3 million in 2021. In 2020 he had commented to the New York Times that he wanted Michael Bloomberg as the presidential candidate along with Amy Klobuchar or Elizabeth Warren. 

But recently, he shifted to the Republican Party. In 2011, he donated over $7500 to the US Senate candidate Ted Cruz. In 2023, Chamath hosted the $50,000 per plate fundraiser for Vivek Ramaswamy, the presidential candidate. In 2024, he was also a part of the committee for the Donald Trump fundraiser hosted by David Sacks. He was also the co-host with Jacqueline Sacks and helped raise over $12 million in 2024. 

Chamath is one of the Founders of the group FWD.us, launched in 2013 with the goal of improving education, bringing in immigration reform, and enabling technological innovation. In the Bloomberg The Next Big Thing conference, Chamath critically rebuked San Francisco’s mayor Ed Lee, and proposed the city provide subsidized housing for low-income residents that were to be funded by taxes paid by startups. 

In January 2021, Chamath challenged the then Governor Gavin Newsom in the event he was recalled. He promised that he would cut state income taxes from 16% to 0% and would offer free education vouchers and a two thousand dollar credit for every child born in California. He even had a campaign website. But in February, he declared that he would not run for governor.    

Chamath Palihapitiya- Personal Life

After Chamath graduated from the University of Waterloo, he followed his then-wife, Brigette Lau, to California. They were married and he had three children with her. Sadly, they divorced in 2018. In 2023, he married Nathalie Dompe, the Italian business executive, and has two children together. 

Chamath Palihapitiya - Facts

• Chamath is an accomplished poker player and has competed in both the World Series of Poker and World Poker Tour events. He won over $175,800. 
• In 2020, he bought a $75 million Bombardier Global 7500
• Chamath has a 10% stake in the Golden State Warriors worth over $520 million. 
• He commented that he regretted helping Facebook become one of the largest social media platforms. 

FAQs

Who is Chamath Palihapitiya?

Chamath Palihapitiya is a venture capitalist, entrepreneur, and former Facebook executive. He's known for his early investments in tech companies and his prominent role in the Special Purpose Acquisition Company (SPAC) market.

What was Chamath Palihapitiya's role at Facebook?

Palihapitiya joined Facebook in 2007 and led the platform's user growth team. He played a key role in expanding Facebook's user base.

Why is Chamath Palihapitiya interested in SPACs?

Palihapitiya believes SPACs offer a more efficient way for promising companies to access public markets, democratizing access to investment opportunities and disrupting traditional IPO processes.