Katzenberg firm raises $600 million
An SEC filing has few details, but WndrCo is likely to invest in tech and entertainment.
The Hollywood mogul behind “Shrek” and “Kung Fu Panda” has embarked on his next act.
Jeffrey Katzenberg, the founder and former chief executive of DreamWorks Animation, has raised $591 million for a new Beverly Hills investment firm, according to a regulatory filing. Representatives for the company dubbed WndrCo (pronounced “Wonder Co.”) and Katzenberg, 66, declined to comment because the company is required to refrain from talking publicly while raising funds.
But it’s clear that Katzenberg and his partners — former DreamWorks Animation President Ann Daly and former Dropbox executive Sujay Jaswa — are not finished raising capital for the new firm, which is expected to pursue investments in emerging companies that work in the increasingly hybrid industries of technology and entertainment.
The company hopes to increase its funding to as much as $750 million “in the next couple months,” according to a person briefed on the plans who was not authorized to comment. Katzenberg has previously displayed his interest in the merging realms of Hollywood and digital media — having led DreamWorks’ investment in teen-focused online video network AwesomenessTV.
“It’s a natural progression for his career,” said Peter Csathy, founder and
chairman of Creatv Media, a business development and advisory firm. “Katzenberg was one of the first senior traditional media executives who really understood this digital transformation.”
The filing Thursday with the Securities and Exchange Commission follows months of speculation about what the outspoken executive would do after selling DreamWorks Animation to Comcast Corp.’s NBCUniversal last year for $3.8 billion. His payout from the sale was more than $390 million, based on his ownership of stock in the company.
After the DreamWorks sale was completed in August, Katzenberg stepped down as CEO to become chairman of the newly formed DreamWorks New Media, made up of the firm’s stakes in AwesomenessTV and technology company Nova, and a consultant to NBCUniversal. He has now relinquished those roles, said a person close to the company not authorized to comment.
Hollywood remained abuzz about whether he would soon create a new media company, rejoin the film business with a studio such as Sony Pictures Entertainment, where leader Michael Lynton recently announced his departure, or perhaps even pursue political office. Katzenberg was a major fundraiser for President Obama and presidential candidate Hillary Clinton.
Katzenberg was not expected to return to the traditional movie business. He told an audience at the 2014 Milken Institute Global Conference in Beverly Hills that movies were no longer a “growth business,” citing DreamWorks’ investments in TV shows and short-form content suited for viewing on mobile devices.
But Katzenberg’s ambitions remain opaque. The WndrCo filing contained little detail about the new venture. The document lists its headquarters as 9355 Wilshire Blvd., described Katzenberg as “manager” and its primary industry as “other.”
“The biggest challenge is focus,” Csathy said. “What is the overarching theme tying this together? We don’t know exactly what it is.”
The person familiar with Katzenberg’s plans said that although WndrCo would invest in new companies, it would not be a traditional venture capital firm. Instead, it will use a model similar to IAC, the investment firm run by Barry Diller that has backed digital entertainment and media firms such as Ticketmaster and Ask.com and is known for its hands-on role in the brands it manages, the person said.
Diller and Katzenberg share a long history. While running Paramount Pictures in the 1970s, Diller hired Katzenberg to be his assistant.
Katzenberg would go on to run Walt Disney Studios for 10 years. After a bitter falling-out with then-Disney Chairman Michael Eisner, he launched DreamWorks SKG in 1994 with Steven Spielberg and David Geffen.
Katzenberg has long embraced new technologies that have influenced the film industry. He was among the first to champion fully computer-animated motion pictures and was an early advocate for 3-D technology, though that innovation largely failed to fulfill its revolutionary promise. Katzenberg is also interested in new distribution models, such as mobile video and streaming. DreamWorks made an early deal to produce original kids shows for Netflix in 2013.
Although Katzenberg is the big Hollywood name on the WndrCo roster, Daly and Jaswa are expected to play key roles as co-founders and executives. Daly was president of DreamWorks Animation for years, largely running the company’s day-today operations, and has served as a close confidante of Katzenberg’s.
Jaswa is a Silicon Valley veteran who is well-respected in technology and venture capital communities. He was the first business officer for cloud storage pioneer Dropbox and was pivotal to the company’s growth until he was replaced as chief financial officer by a former Motorola executive in 2015.
Jaswa has worked as a management lecturer at Stanford University’s business school, teaching classes on human resources for start-ups and a course on “disruptive innovation.” His WndrCo involvement will probably be important for developing relationships in technology industries and overseeing the growth of companies that join its portfolio.
Already, 18 individuals have invested in WndrCo., according to the filing, though none of the investors were named in the document. The minimum outside investment in WndrCo. is $25 million, according to the filing.