Explained: How Vy Capital quietly became Musk’s biggest backer—and why it’s going solo

Explained: How Vy Capital quietly became Musk’s biggest backer—and why it’s going solo

Vy Capital, the ultra-secretive tech investment firm that has become one of the biggest backers of Elon Musk’s ventures, will stop raising money from outside investors after delivering years of outsized returns. According to people familiar with the matter, the firm informed its limited partners this month that it would no longer accept external capital and will continue investing solely from its internal pool, the Financial Times reported.

A decade of eye-popping returns

Founded in 2014 by John Hering and Alexander Tamas, Vy Capital has amassed roughly $15 billion in assets under management. One person with knowledge of the firm said it has achieved an annual return of about 28% over the past ten years. Despite its lean team—just four investors and a total headcount of 20 spread across California and London—the firm has quietly grown into a powerhouse in tech investing, largely thanks to early and aggressive bets on Musk-led companies.

Backing Musk’s empire

Vy’s close ties to Elon Musk are well known within Silicon Valley but rarely discussed publicly. The firm first backed SpaceX at a valuation of $15 billion and remained a leading investor as the company surged to a valuation of $400 billion. Vy has also taken significant positions in Musk’s other ventures including xAI, which is targeting a valuation of up to $200 billion, and Neuralink, now worth $9 billion. The group is believed to be the largest external shareholder in both Neuralink and The Boring Company.

In 2022, Vy committed $700 million to Musk’s $44 billion acquisition of Twitter, now known as X, making it one of the largest contributors to the deal. A year later, Vy’s then-managing director Pablo Mendoza joined Musk’s internal “transition team” at Twitter and later became head of finance for xAI, which subsequently acquired X.

From stealth to central player

Despite its growing influence, Vy Capital maintains an extremely low public profile. Its website consists of only a single page with a motto, locations, and contact information. The firm has raised three funds of less than $1 billion each over the years, but has never marketed itself aggressively—relying instead on a tight circle of relationships, particularly with Musk.

The fund’s founders, Hering and Tamas, are expected to continue their close partnership with Musk, even after the firm transitions to self-funded operations. Their investments have extended beyond Musk’s empire as well, including stakes in Reddit, Indian food delivery service Zomato, fintech firm Upgrade, and AI chipmaker Cerebras. Vy also holds a significant position in the Indian home services firm Urban Company, which is expected to go public soon.

Quiet connections, big influence

Vy’s quiet influence in Musk’s inner circle is underscored by its personnel ties. Jared Birchall, Musk’s top adviser, had his son work as a summer analyst at Vy in recent years, highlighting how deeply embedded the firm is in Musk’s orbit.

As the fund shuts its doors to outside capital, it cements its role as a boutique powerhouse—lean, quiet, and influential—operating at the centre of some of the most ambitious tech ventures of this generation.