Jeffrey Katzenberg’s Investment Firm Takes a Risky Bet on Mobile Video

One recent December evening, DreamWorks Animation co-founder Jeffrey Katzenberg weaved through a room atop a trendy Hollywood hotel. As the sun set and the sky glowed pink through the windows, he greeted his guests, an assortment of soft-spoken private equity investors mixing with music industry icons, Silicon Valley technophiles, and a Bulgari jewelry heiress. Although the small talk was awkward, they all had at least one thing in common: Katzenberg and his partners had personally persuaded them to plow a combined $769 million into their newest brainchild, representing the ultimate Valley-Hollywood mashup, WndrCo.

Pronounced “Wonder Co.,” the consumer technology holding company is part private equity shop, part incubator, and part old-fashioned venture investor. It mostly makes careful bets on unexciting but profitable tech companies while sprinkling a few hundred thousand dollars as seed investments here and there across dozens of embryonic startups that could flop—or define the next generation of entertainment. “It’s an asymmetrical risk and reward,” says Colin Lind, a Bay Area-based pilot and retired professional investor who’s putting a portion of his personal fortune into WndrCo. “The downside risk is you get a T-bill rate of return, and the upside is 20 times your money.”