Elon Musk backer Vy Capital closes to outside investors after windfall
Vy Capital, the low-profile investment firm known for its deep ties to Elon Musk and his ventures, has announced it will no longer accept funds from external investors after a period of extraordinary financial performance. The firm’s decision marks a significant turning point, underscoring both its internal capital strength and a desire to operate more independently in the high-stakes world of tech investing.
Founded in 2014 by Alexander Tamas and John Hering, Vy Capital has grown into one of the most quietly powerful financial forces in Silicon Valley. The Dubai and San Francisco-based firm now manages approximately $15 billion in assets, with an annualized return of around 28% since its inception — a staggering figure that surpasses most hedge funds and venture capital firms.
Over the past five years, Vy Capital has made headlines — not by marketing itself, but through its aggressive support of Musk-led ventures. Vy was one of the earliest and most significant backers of SpaceX, Neuralink, The Boring Company, and, more recently, xAI and X (formerly Twitter).
Its $700 million commitment to Musk’s 2022 Twitter takeover was among the largest private contributions in the $44 billion deal. Since then, it has doubled down, becoming a major shareholder in xAI — Musk’s artificial intelligence company — which is now reportedly valued near $200 billion, a 10x increase from its previous round just a year ago.
Sources familiar with the matter say that Vy Capital recently informed its limited partners that it would not be launching any new external funds and would stop accepting new outside capital altogether. The move follows “a string of massive wins,” one insider said, describing the firm as “flush with internal capital” and no longer needing outside commitments to pursue its ambitions.
“The windfall from xAI and SpaceX alone gave them unprecedented financial leverage,” another source added. “They’re now playing with house money.”
Lean, Elite, and Tightly Linked to Musk
Unlike most major venture firms, Vy Capital runs an unusually lean operation. It employs around 20 people globally, with just four core investors. Rather than operating in traditional venture capital fashion — with large, multi-stage funds and a wide array of portfolio companies — Vy has opted for concentrated bets on transformative companies, particularly those aligned with Elon Musk’s long-term vision.
Their model mirrors that of a tech-focused family office more than a conventional investment firm. And that’s exactly what they’re transitioning into: a self-sufficient capital engine, no longer beholden to outside LPs, quarterly reports, or fundraising cycles.
The firm’s tight-knit relationship with Musk is more than financial. Vy executives have held influential roles within his companies. For instance, Pablo Mendoza, formerly at Vy, helped manage Twitter’s financial restructuring post-acquisition, and later took on a leadership role at xAI. Meanwhile, Jared Birchall’s son — Birchall being Musk’s longtime wealth manager — interned at Vy, suggesting the firm is deeply enmeshed in Musk’s trusted inner circle.
According to The Financial Times, Vy has been involved in at least three of the biggest private tech valuations in recent history: SpaceX, xAI, and Neuralink. At SpaceX, the firm has participated in multiple rounds, benefiting from its meteoric rise as it approaches a rumored valuation of $400 billion.
A Strategic Exit from Traditional Fundraising
The decision to close off outside investment is not entirely surprising to industry watchers. After raising three modest-sized funds — none of them exceeding $1 billion — Vy Capital has always played a different game. Their ability to deliver outsized returns without chasing hundreds of startups allows them to remain focused and nimble, and now, completely autonomous.
“They don’t want to be just another VC firm. They want control, precision, and alignment,” said one tech investor familiar with their operations.
This move could mark a larger trend among elite funds flush with cash — a retreat from traditional fundraising toward more internal, mission-driven capital deployment. With fewer reporting requirements and no pressure to deploy capital at scale, Vy can now pursue deals on its own terms.
Some industry insiders speculate that the firm may eventually evolve into something closer to a private holding company, with the flexibility to incubate its own ventures or take large, patient positions in emerging technologies without concern for liquidity timelines or investor exits.
What This Means for Musk’s Ecosystem
For Elon Musk, Vy Capital’s shift is likely to be welcomed. The fewer cooks in the kitchen, the better — especially when it comes to controversial or long-horizon ventures like brain-computer interfaces (Neuralink), tunneling (The Boring Company), or AGI research (xAI).
Vy’s withdrawal from the public fundraising scene also reduces outside scrutiny, allowing Musk to maintain greater strategic control with the backing of a quiet but deep-pocketed ally.
Moreover, Vy’s internal capital capacity could allow it to support future Musk-led endeavors at scale — whether it’s interplanetary colonization, decentralized AI, or autonomous robotics.
Conclusion
Vy Capital’s decision to close its doors to outside investors marks the culmination of a decade-long strategy that emphasized discretion, loyalty, and high-conviction investments. Their partnership with Elon Musk has reaped extraordinary returns, positioning them to become one of the most formidable and independent players in the tech investment world.
As the firm turns inward, its next moves — whether doubling down on Musk’s universe or venturing into new frontiers — will be closely watched by those seeking to understand the quiet power brokers shaping the future of technology.