Investment Portfolio
(This list includes all investments of $500,000 or more, displayed alphabetically.)
Allogene Therapeutics
Allogene is run by the former heads of Kite Pharma (Arie Belldegrun and David Chang) and is a clinical stage biotech company focused on developing off the shelf (allogeneic) CAR T therapies for cancer. Following Kite’s success, its principals are devoted to developing new cell therapies that can fight cancer faster, more reliably, and less expensively than the autologous competition. In addition to a founder’s stake, Sonostar and its principals have invested several million in multiple private and public rounds in the company. In addition to data on multiple myeloma and other blood cancers, Allogene should announce its initial results in solid tumor treatments in late 2022 (beginning with renal cell carcinoma).
American River Fund
Sonostar and its principals and afilliates invested $2 million as LP’s in the American Rivers Fund in Q4 2021. ARF is a wholly owned and actively managed fund of Maritime Partners LLC, which recently became the largest owner/lessor of marine vessels in the United States after its successful acquisition of J. Russell Flowers, Inc. in Dec 2021. With a fleet of over 1,600 vessels in service, Maritime Partners offers leasing services to ship operators across the country, with a focus on inland marine barges and tugboats. ARF is targeting a tax advantaged annual distributed yield in the low teens in addition to the potential for price appreciation on its managed fleet.
Andersen, Renewal by
Renewal by Andersen is the nation’s largest residential window replacement business. With individual businesses established based on specific geographic territories, RbA is a direct to consumer marketing solution that sells and installs high quality Andersen replacement windows in consumer’s homes throughout the country. Moore Holdings (controlled by Sonostar Partner, David Moore) owns a controlling interest and Sonostar principals and affiliates own a significant minority interest in the RbA Long Island, New Jersey, Atlanta, San Francisco, Toronto and Midwest territories. Excluding the Moore Holdings investment, Sonostar principals have individually and through affiliated entities invested several million dollars in multiple investments in what continues to be our most successful investment to date.
Andie
With operations in New York and Australia, Andie is a global direct-to-consumer women’s bathing suit and swimwear company. The inclusive brand, which takes pride in being created for every woman, every activity and every body, has distinguished itself with its high quality, attractive, competitively priced products since its launch in 2018. Sonostar principals invested in two rounds for this venture, and, since inception, revenue growth has been consistently strong. The company finished 2021 with nearly $30 million in product sales, and is projecting 50+% revenue growth for 2022. Andie remains well positioned to achieve these targets and recently announced a successful $18.5 million series B round in late 2021, led by Marcy Venture Partners.
Aqua Finance Inc.
Aqua Finance is a consumer finance company that was formed originally to provide dealers with financing tools and offerings for homeowners purchasing water treatment services for their homes through its financing relationship with Culligan water softeners. To expand its finance business to other home improvement projects, HVAC financing, vacuum financing, medical financing and more, and in an effort to create more attractive sources of funding by providing a pipeline of products for loan backed securities, the Company agreed to sell itself to Blackstone in 2018. Sonostar principals along with various partners from Two River joined the Blackstone acquisition team providing several million dollars of acquisition equity financing. Aqua’s ambitious growth strategies were realized under Blackstone’s experienced guidance, and their success led to an offer from Apollo’s Athene in November 2021 to acquire the consumer lending platform at a valuation of approximately $1 billion. The deal is awaiting final state regulatory approval, and is expected to close in 1H 2022. The contracted $1 billion acquisition price represents an attractive multiple of Sonostar’s investment.
ARCA Family of Funds
Arca Funds is an asset management firm that provides investors the ability to gain direct exposure to the Digital Asset and cryptocurrency sectors. Arca launched their flagship Digital Asset Fund (DAF) in 2018. That fund has generated extraordinary returns since inception and has helped solidify Arca as one of the leading digital asset management firms with over $600 million under management. Following DAF, Arca launched their Bitcoin Trust, offering direct exposure to Bitcoin; Digital Yield Fund, an income-focused fund that uses active investment strategies to produce targeted low double-digit effective yields; Endeavour Fund in late 2021 targeting early-stage ventures; and an NFT focused fund in Q4 2021. Sonostar’s principals have been impressed with the portfolio management team at Arca since first investing as LPs in late 2020. Our investments into each of the firm’s family of funds collectively total several million dollars.
Baby Generation
Baby Generation is a direct-to-consumer baby stroller and related products company. Since inception, the company developed a high-end stroller with all the features and positives of an UPPA baby or Bugaboo stroller offered at less than half the price. The company has had immediate success – generating positive cashflow from year one. In 2021, the company had more than $31.5 million in net revenues, and continues to remain EBITDA positive as it rolls out a physical retail presence in select Target stores.
By Heart Infant Formula
Sonostar and its principals invested in this infant formula business in 2019. Since that time, the company purchased its own manufacturing facility and completed final testing of its infant nutrition products, successfully achieving coveted FDA approval, with trial enrollment nearly completed. Through ownership of its supply chain as well as the manufacturing facilities, the company is well on its way to becoming the 4th fully integrated U.S. based, FDA registered infant nutrition company in the world. The goal of the company is to provide the infant nutrition category with next generation quality focused on the most current nutritional science. The company launched its first commercial product in 2021, and has already proven to achieve extraordinary sales as it has meaningfully stepped up production to provide assistance to families struggling with the ongoing infant formula shortage.
Corino Theraputics
Corino is focused on developing a human transthyretin therapeutic that slows or reverses all forms of Transthyretin Amyloidosis (ATTR). With newly approved therapies (from Pfiizer and others) showing real survival benefits in hereditary ATTR amyloidosis patients, over time more patients are facing central nervous system symptoms with no approved therapies to treat those complications. Corino’s core product CRX-1008 has shown stabilizing activity and the ability to cross the blood brain barrier suggesting the potential for efficacy in systemic as well as CNS manifested amyloidosis. The Company has completed its pre-IND meeting with the FDA and intends to launch a Phase 2 trial in the coming months. Sonostar and its principals invested $1 million in the company in early 2020.
Grab
Grab is the “Superapp” of Southeast Asia. Best known for its ride hailing services, the ‘Everyday Everything App’ has expanded over the years to include food delivery, mobile payment services and personal financial solutions in categories including insurance, financing and wealth management. Following its acquisition of UBER’s southeast Asian operations, Grab became the largest ride hailing company in that part of the world. Through an investment vehicle called Silvershore, Sonostar principals and certain of the Two River principals invested several million dollars in a round that gave Grab a post money, post UBER merger valuation of approximately $8 billion. Since that time Grab has done multiple follow on fundraisings, and in 2021 the company came public via Altimeter Capital’s Altimeter Growth SPAC at a $40 billion valuation—the largest SPAC deal in history at the time. Extended Pandemic-driven shutdowns across the region have had a significant impact on Grab’s ability to achieve their projected path toward profit generation, leading to a corresponding decline in public market support. We continue to believe that Grab is well positioned to become the leading Southeast Asian Superapp as the region progresses with its pandemic recovery. Trading near cash levels now, Grab has the potential for significant appreciation over the next several years.
Hubble
Hubble is a direct-to-consumer e-commerce subscription service providing comfortable daily wear contact lenses to consumers at a price that is 30 – 50% less expensive than the brand leaders. Sonostar principals and Two River were significant founding investors and have participated in each subsequent investment round. Sonostar’s principals have invested approximately $3 million in Hubble. With its recent addition of Contacts Cart, Hubble now offers a full range of contact lens prescriptions for consumers, including most of the leading brands. The company is EDITDA positive, and generating revenue at an approximately $90 million annual run rate. In June 2021 Hubble hired former 1-800-Flowers.com Executive, Steve Druckman, as CEO to further drive growth, and help take Hubble to the next level.
IconOVir Bio
IconOVir is a preclinical-stage biotech company pioneering the next generation of oncolytic virus therapy to improve the treatment of patients with cancer. Oncolytic viruses are a unique type of virus that infects and lyses (breaks down) cancer cells, but not normal cells. IconOVir has created a proprietary oncolytic virus platform that is designed to address key limitations of first and second-generation oncolytic viruses with the goal of providing personalized therapy for various types of cancer patients.
Kronos Bio
Kronos began its operations with proprietary drug screening technologies and has used those technologies to identify novel therapies designed to make inroads against untreatable cancer targets. Kronos has in-licensed two compounds from Gilead to treat AML, and successfully initiated Phase 2/3 trials for that indication in 2021. In addition, Kronos is currently advancing two pre-clinical programs – one to suppress MYC driven transcription and one to reduce cell growth and Androgen Receptor expression in treatment resistant prostate cancer cell lines. Sonostar provided $1 million in Founder capital and has provided additional capital in multiple subsequent rounds, alongside our partners from Two River. Kronos completed its IPO in October 2020, with the IPO pricing representing more than a 6x return on our invested capital as of Q4 2020. While recent market conditions across the early-stage biotech space have negatively impacted the valuation of Kronos, the company remains fully on track with their upcoming milestone targets, and continues to be backed by unwavering support and enthusiasm from their impressive management team.
Neogene Therapeutics
Sonostar and its principals invested alongside Two River Group in the initial and subsequent funding of this pre-clinical biotech company focused on identifying T Cell receptor (TCR) genes in solid tumors and identifying appropriate neo-antigen personalized T Cell therapies to treat these cancers. The company was formed in 2018 and recently completed a $110 million Series A financing from investors representing multiple highly respected biotechnology funds.
Nuvectis
Founded by Ron Bentsur, former CEO of Keryx Biopharmaceuticals, Nuvectis is an early-stage biopharmaceutical company focused on the development of innovative precision medicines for the treatment of serious conditions of unmet medical need in oncology. Nuvectis recently entered a clinical phase 1 study for their HSF1 pathway inhibitor, which has initial target indications of advanced ovarian clear cell carcinoma (OCCC), and relapse/refractory endometrioid ovarian cancer. In addition, Nuvectis is currently progressing in preclinical studies with their SRC/YES1 kinase inhibitor with target applications across various solid tumor cancer types. Sonostar and its principals provided $500K of seed capital to the company, which helped them progress toward raising an additional $16 million through a successful IPO in February 2022. Shares of Nuvectis have since more than doubled from their IPO price, offering a strong indication of initial market acceptance, as well as a significant unrealized return versus Sonostar’s initial funding valuation.
Plum Life
Founded in 2020, Plum Life offers a proprietary digital life insurance selling platform that has been designed exclusively to benefit the Insurance Agent. The company’s wholistic approach has allowed them to enhance the agent’s entire experience from underwriting, quote generation, application and policy issuance. Plum’s founders have decades of life insurance experience and a strong belief that the life insurance agent remains the dominant sales channel when it comes to selling life insurance products. Sonostar invested $2.5 million in the initial and subsequent funding of Plum Life, including their latest round in early 2022, which was led by insurance venture firms ManchesterStory and MTech Capital, two of the most well respected venture investors in InsurTech.
Taxi Revival Alliance, LP
Taxi Revival Alliance was launched in 2019 to gain direct exposure to New York City’s yellow cab business through the purchase of a portfolio of New York City taxi Medallions. Sonostar and its principals invested as LP’s in the fund at its inception to take advantage of their attractive current yield target, as well as in a subsequent round during the peak of the pandemic when medallion prices fell to record lows. Yellow cabs in New York continue to feel the pandemic’s impacts, and the slow return of taxi drivers to the roads has had a follow-on impact on the fund’s realized current yield performance. Medallion prices, however, have experienced a significant rebound from their pandemic lows, with prices based on recent transactions indicating the potential for significant capital appreciation. Sonostar is working with the General Partners to determine and implement next steps.
Vitralogy LLC
Vitralogy is an OaaS platform that fully automates data analysis of cooling towers in offices, hotels and apartment buildings in order to assure compliance with regulations regarding the presence and measurement of Legionella disease. The platform is designed to provide an end-to-end solution enabling building owners to ensure full and complete compliance with Legionella regulations. In addition to Legionella, Vitralogy is offering a suite of services to the commercial real estate market enabling assurance of regulatory compliance and cost-effective monitoring solutions. Sonostar’s principals have invested several hundred thousand dollars in this new technology solution.
Vida Ventures
Vida is an early-stage biotech fund run by the partners of Two River and Wildcat Capital Management (David Bonderman’s fund). Vida has already reported compelling returns since its inception four years ago. Sonostar principals committed $2.5 million to the fund and to its sidecar investment in Allogene. At this point the fund is fully invested, and is expected to increase distributions of realized gains over the next several years.
76 Bio
Continuing on Kronos Bio’s theme of attacking “undruggable targets” in cancer, with KRON management approval, a select team of Kronos executives formed a new venture with a goal of designing targeted protein degraders with initial programs in oncology. The Company is currently operating in stealth mode; but the team believes that they are building a powerful and broadly applicable platform to develop novel therapies. Sonostar is pleased to back this proven scientific team with an initial investment of $600,000.
Some of our prior successes and failures
Successes
Paradigm Direct – A performance marketing company – sold to Mosaic for $200 million.
Velcera (Pet Armor) – A generic flea and tick product company sold to Perrigo for $160 million.
USHS – the largest kitchen and deck remodeling company in the US, IPO’ed for 10x and subsequently sold to Home Depot.
Marquis Jets – The first 25 hour private jet card subscription service. Sold to Net Jets for 3x return.
Wintegra – a fabless semiconductor company providing single chip solutions for the convergence of voice and data infrastructure – sold to PMC – Sierra for $240 million.
Keryx Biopharmaceuticals – early stage biotech company focused on development of perifosene for cancer as well as various drugs for chronic kidney disease. IPO’ed and subsequently sold shares in the market at prices ranging between $7 - $18 per share.
Kite Pharma – under the leadership of Arie Belldegrun, Kite developed one of the first CAR T drugs to be approved by the FDA. We were an early investor and participant in Kite’s IPO. The Company was sold to Gilead for $11.9 billion in late 2017.
Allogene – from an initial founders investment to multiple subsequent funding’s the company has IPO’d and has a current valuation of more than $1.5 billion. The company has shown meaningful success in allogeneic treatments of blood cancers and has continuing trials ongoing designed to measure durability and applicability to solid tumors.
Global Blood Therapeutics (GBT) – Sonostar and its principals established a large position in shares of GBT in the low 30’s in Q4 2018 in anticipation of accelerated approval for Voxeletor, GBT’s lead drug candidate for the treatment of sickle cell disease. Sonostar exited its position in the mid 70’s in Q4 2019 following approval and launch of the drug.
Aqua – Our interest was purchased alongside Blackstone in 2018 at a $200 million valuation and subsequently sold to Apollo/Athene at a multiple of that valuation.
Some Failures
Double Agent – interactive search engine and information organization portal. Company was unable to raise additional funds and closed in 2001.
Leading Web Advertisers – An advertising monitoring service providing real time advertising tracking on the internet. Company was sold to CMP in 2002 at a substantial discount to the value of our investment.
Tigris Biopharmaceuticals – start up biotech focused on early stage cancer research. After two successive failed trials, the Company was sold to a private investor at a substantial discount to our investment.
Night Operations Systems – High powered hand held military grade flashlight capable of disruptive illumination, and enhanced covert situational awareness. Unable to raise additional funds after several years of delayed development.
Golden Goal Soccer and Lacrosse Tournament Park – 300+ acre sports park featuring state of the art synthetic fields and housing for youth soccer and lacrosse. Fell victim to the recession in 2008 and was sold at auction for $2.5 million – a fraction of the $12 million invested.
Fire Capital – a real estate fund focused on the development of middle-class housing projects in various large cities in India. Hurt by setbacks during the recession, the business was sold for approximately 40 cents on the dollar in 2017.
Corbus Biopharmaceuticals – the Company’s primary drug candidate, lenabasum, failed in its Phase 3 clinical trial for scleroderma, resulting in a huge decline for the stock. Because of hedging, Sonostar’s losses were materially reduced but the outcome was disappointing and costly, nonetheless.