Founders Fund, the influential venture capital firm co-founded by Peter Thiel, has completed the raise of its third growth fund, closing at $4.6 billion, well above the $3 billion target initially reported in February. This step up from its $3.4 billion predecessor, closed in early 2022, underscores renewed investor confidence and signals that the venture capital market is entering a new bullish phase after a muted 2023.
Strong backing from investors
The new vehicle, Founders Fund Growth III, is focused on late-stage investments and drew capital from a whopping 270 limited partners (LPs), according to a regulatory filing on Friday with the Securities and Exchange Commission. The oversubscription reflects the firm’s strong reputation and consistent performance, making it a magnet for institutional investors and high-net-worth individuals seeking exposure to high-growth tech companies.
Notably, a substantial portion of the fund’s capital reportedly came from the firm’s own general partners, including Peter Thiel, Napoleon Ta, and Trae Stephens, demonstrating strong internal conviction.
The fundraising is also a reversal from Founders Fund’s more cautious stance in 2023, when it downsized a new fund amid the venture capital downturn. At the time, deal activity had slowed dramatically due to macroeconomic uncertainty, rising interest rates, and declining tech valuations. This latest raise, however, suggests that the firm believes the market has turned a corner, and that late-stage opportunities, especially in sectors like artificial intelligence and defence tech, are ripe for backing.
Doubling down on defence tech
While many venture firms are pouring their resources into artificial intelligence, Founders Fund is taking a broader view by doubling down on defence technology, a sector it has backed long before it became trendy. Partner Trae Stephens, also a cofounder of Anduril, has been a vocal advocate for investing in national security infrastructure and has even published manifestos defending the ethical rationale for venture funding in this space.
With geopolitical tensions rising and governments increasing defence budgets, defence tech has become a key sector to watch, and Founders Fund is well-positioned as one of its earliest champions. The firm’s ties to defence startups, combined with its proximity to former Trump administration officials and national policy debates, give it a unique advantage in identifying and scaling frontier technologies with military and security applications.
A quiet yet strategic European footprint
Beyond the U.S., Founders Fund has been increasingly active in the UK and European startup ecosystems, which have matured considerably over the past five years. It has backed UK cybersecurity firm Darktrace, AI research powerhouse Stability AI, and blockchain forensics startup Elliptic, among others. These investments reflect the firm’s interest in frontier technologies and its belief that Europe can produce globally competitive companies, especially in security and AI.
The strategic appeal of Europe lies in its strong research institutions, growing pools of technical talent, and increasingly favorable policy environments for innovation. As governments across the continent pour resources into digital sovereignty and defence modernisation, the timing may be ideal for US-based funds to scale their exposure.
Positioned for the next wave
With fresh capital and renewed conviction, Founders Fund is now poised to shape the future of high-growth tech in sectors that go beyond today’s hype cycles. Whether it’s defence, AI, or hard science startups, the firm is known for backing companies that aim to solve problems with long-term, civilisation-scale impact.
This new $4.6 billion fund gives Founders Fund the firepower to not only participate in late-stage rounds but also to set terms, support aggressive expansion, and provide follow-on capital in uncertain markets. It also reinforces its position as one of the few VC firms that can consistently raise mega-funds without compromising on ideological or strategic focus.
As 2025 unfolds, Founders Fund Growth III will be a critical vehicle to watch not just for the startups it supports, but for the signals it sends about where tech, geopolitics, and venture capital are heading next.
