Amid growing uncertainty over what technology funding will look like in the coming months and possibly years, one of the newcomers to the venture capital block in Europe today announces the closure of its latest and largest fund to date. Felix Capital The London-based firm, founded and led by Frederick Court, has raised $600 million. He plans to use the money to continue investing primarily in commercial startups complemented by businesses building the tools to launch them (including new areas of finance related to cryptocurrencies and Web3) and the future of work in general, including sustainability. , too much.
Felix believes that the collective experience of her investors, combined with her investment focus, will help her get through what is definitely a tougher time for the world of funding and startup growth, perhaps laying more ground for healthier approaches overall.
“I’ve been through a couple of recessions since 2000,” Kort said in an interview. “I spent a lot of time undoing what was done before. Complex terms like preferred income, we would never do that now. Even though all the money coming into the industry very quickly, say from hedge funds or others unrelated to the industry, it came with a mantra of short-term gain. But our business is essentially a long-term business and it takes a long time to build a great company. This is even more true for the consumer, you can’t just over-accelerate the brand.”
Felix portfolio includes now public companies such as Farfetch and Deliveroo, as well as the likes of Sorare, Papier, Juni, owner of Cocomelon Moonbug, scooter startup Dott and Goop. Felix invests in both early stage and growth rounds. His plan is to double the existing stakes and also bring in 20-25 more companies, mostly in Europe but also in North America.
The fund will increase the total amount Felix manages to $1.2 billion. Not only is this a big jump from the $120 million the firm launched in 2015, but it’s also a step up from what Felix wanted to bring up. Court said his original goal was $500 million.
This fact and the existence of the fund itself are remarkable in their own right, but perhaps they stand out even more given the current state of the market.
After several turbulent years of record fundraising and raucous valuations, the tech world is navigating difficult waters these days when it comes to finance. Call it a market correction or something more directly related to any number of economic, political and social shifts, but many are bracing themselves for a moment when money just won’t flow as freely as it used to, not from investors, but potentially – and what else more anxious, not from customers.
But interestingly, some of this doesn’t quite work in the more direct sense that you might think. PitchBook noted in its most recent quarterly review of venture capital activity in Europe (starting at the end of April, so the next one is unlikely to take place until the end of July) that European VC deals – i.e. investments by European VCs – were still in line with the same quarter a year ago, meaning they haven’t slowed down. At the same time, Great Britain (the birthplace of Felix) remained the largest sales market.
However, there are definitely signs on the horizon if you believe in the downward seepage theory.
Exits fell off the cliff both in number and valuation. This was mainly due to a huge sell-off in the public markets, which had a domino effect on potential IPOs (which, in a trickle-down style, would affect startups in later stages as well as growth rounds and even smaller and early down rounds). line). PitchBook notes that sales have given way to acquisitions this quarter, with around 144 M&A deals totaling €5 billion. (That’s compared to 16 public listings totaling €1.9 billion, the report said.)
As far as the venture capitalists themselves and what the fundraising business looks like for them, these are signs that we are on the path to an important consolidation. After years of many celebrity investors going solo and launching their own funds, “the number of European VC funds has plummeted,” notes PitchBook, and the number of new funds created this year looks like it could be the lowest since. year 2013. However, as with the startups themselves, there are still signs that the capital is earmarked for the most promising in the field, at least for now: in total, the larger funds raised €7.4 per quarter, as did a year earlier.
As part of all this, the Felix Foundation highlights that there remain some very important exceptions to these trends, as well as some potential hopeful signs of what will endure more bearish times.
One such detail is that the firm invests around a particular thesis rather than spreading bets too widely. This could lead to a more difficult outcome if the bottom falls out of this thesis, but it’s just as likely that it means Felix understands his field and might be better equipped to help his startups through difficult times. The other is that Felix seems to be part of a group that is still raising more funding than expected, even while others may be struggling.
Felix’s court said the market climate could work in his favor – or at least he’s going to make the most of a situation where fundraising will inevitably be less competitive and generally slower cycles.
“It’s great to be in the market with new funds right now,” he said. “We will be able to work the way we like, more deeply and with more time and new relationships. We won’t have the time constraints we used to have.”
The company has produced several notable hires late last year bringing in ex-Facebook CEO Julien Codorniu and Susan Lin as partners. Two more female investors are added to this mix, Maria Auersperg de Lera and Sophie Lack, plus three new advisors: Maria Raga (CEO of Depop), Musa Tarik (senior marketer for brands such as Apple, Nike, Ford and Airbnb) and Branko Milutinovic (founder and CEO of a gaming company) . Nordeus).
Credit: techcrunch.com /