Vy Capital, a discreet venture capital firm with a modest team of four investment professionals, has amassed a substantial $40 billion stake in SpaceX, becoming one of the rocket manufacturer’s largest shareholders. The firm’s involvement with SpaceX dates back to 2016, when it first invested at an approximate valuation of $15 billion. Since then, Vy Capital has gradually increased its holding to about 3.4 percent, surpassing the disclosed stakes of prominent investors like Sequoia Capital and Andreessen Horowitz.
This position makes Vy Capital SpaceX’s fifth-largest shareholder, according to market data. The firm’s close ties to Elon Musk extend beyond the space company; Vy Capital is also the largest external investor in Musk’s tunneling enterprise, The Boring Company, and the neurotechnology firm Neuralink. In 2022, Vy Capital committed $700 million to Musk’s acquisition of Twitter. Leadership under John Hering and Alexander Tamas has driven these investments, with the firm benefiting significantly from SpaceX’s recent public offering, which valued the company at around $1.75 trillion.
Vy Capital’s assets under management reportedly increased from $27 billion at the end of 2023 to $50 billion by June 2024, based on an investor letter reviewed by analysts. The letter emphasizes the firm’s strong conviction in Musk’s entrepreneurial and engineering capabilities, forecasting that SpaceX’s valuation could exceed $10 trillion within five to seven years. Since its founding in 2014, Vy Capital has achieved a gross internal rate of return of 41 percent and has distributed $4.6 billion to its investors, with expectations for substantial growth in distributions in the near term.
Despite its significant holdings and historical returns, Vy Capital operates with a notably low public profile. It maintains a minimal online presence and avoids routine investor communications such as blog posts or podcasts. Investors describe the firm’s approach as focused primarily on identifying and backing promising companies rather than on publicity.
Founders Hering and Tamas have cultivated a close working relationship with Musk over several years. Hering, in particular, played an active role in supporting SpaceX during challenging periods, including investing more than $100 million shortly after the Falcon 9 rocket failure in 2016 and dedicating resources to the early development of the Starlink satellite internet project. Hering has also served as a board member at The Boring Company and was involved in major fundraising rounds, including a recent $3 billion raise valuing the company at $23 billion.
Vy Capital’s investment portfolio extends beyond Musk’s enterprises. The firm has stakes in companies such as the semiconductor manufacturer Cerebras, which went public in 2024, and a range of technology and consumer companies including Reddit, Indian food delivery firm Zomato, fintech company Upgrade, and home services platform Urban Company. Reddit CEO Steve Huffman has praised Vy Capital for its deep understanding of the company during its early funding rounds.
The firm was formed when Tamas, who previously worked at Goldman Sachs and with DST Global founder Yuri Milner, joined forces with Hering, who had begun making smaller investments independently. Together, they built Vy Capital into a prominent but rarely publicized investment group. Despite managing tens of billions in assets, Vy Capital maintains a lean workforce of about two dozen employees and limited external fundraising, having closed to outside investors last year following a series of successful returns.
Several institutional investors regard Vy Capital as one of their best-performing money managers. The firm’s third fund, launched two years ago, has nearly doubled in value, posting a net internal rate of return close to 60 percent, placing it among the top tier of venture capital funds. Industry insiders predict that Vy Capital’s influence in technology investing will continue to grow as its portfolio companies mature.