As uncertainty mounts about how technology funding will look over the coming months and maybe years, one of the newer companies on the VC block in Europe today announces the closure of its latest and largest fund yet. Felix Capital – the London-based firm founded and run by Frederic Court – has raised $600 million. It plans to use the money to continue investing primarily in its sweet spot of commerce-driven startups, supplemented by companies developing tools to power them (including new spins on finance centered around cryptocurrency and Web3) and the future of work at large , including sustainability , too.
Felix believes the collective experiences of his investors, combined with his investment focus, will help weather what are significantly more challenging times for the world of startup funding and growth, and potentially lay more foundations for overall healthier approaches.
“I’ve had a few downturns since 2000,” Court said in an interview. “I spent a lot of time undoing what was done before. Complex terms like preferred returns, we would never do that now. For all the money that’s pouring into the industry very quickly, say from hedge funds or others who aren’t in the industry, they came in with a mantra of short-term gains. But our business is basically a long-term business, and it takes a long time to build a great company. This is even more true on the consumer side, you can’t just over-speed a brand.”
Felix portfolio These include companies that have now gone public, such as Farfetch and Deliveroo, as well as Sorare, Paper, June, Cocomelon-owner Moonbug, scooter startup Dott, and Goop. Felix invests in both early-stage and growth rounds. His plan is to double existing bets and add 20-25 more companies to the group, mostly in Europe but also in North America.
The fund will bring Felix’s total under management to $1.2 billion. That’s not just a big jump from the company’s $120 million started with in 2015, but it’s also a jump from what Felix had wanted to increase. The court said his original goal was $500 million.
That fact, and the very existence of the fund itself, are remarkable in themselves, but perhaps even more so given the current state of the market.
After a string of bubbly years of record-breaking fundraising numbers and skyrocketing valuations, the tech world is navigating tricky waters when it comes to finances these days. Call it a market correction or something more directly related to a range of economic, political and social changes, but many are preparing for a moment when money just won’t flow as freely as before, no by investors and possibly – and perhaps more worryingly – not by customers either.
But interestingly, some of it isn’t quite as immediate as you might think. PitchBook is the best known recent quarterly overview of VC activities in Europe (Late April, next one not expected until late July) that European VC deals – that is, investments by European VCs – were still in the same quarter as a year ago, meaning they haven’t slowed down. Great Britain (Felix’s home base) remained the largest market.
However, the signs are definitely on the horizon if you believe the trickle down theory.
Exits have fallen off a cliff in both number and rating. That was largely due to the huge sell-off in public markets impacting potential IPOs (which will trickle-down style later stage startups as well as growth rounds and even smaller and earlier rounds). the line). PitchBook noted that this quarter’s exits were overtaken by acquisitions, which covered approximately 144 M&A deals totaling €5 billion. (By comparison, just 16 listings have taken up a combined value of $1.9 billion, it said.)
More directly relevant to VCs and how the fundraising business looks to them are the signs that we’re headed for some major consolidation. After years in which many star investors went into business for themselves and launched their own funds, “the number of European VC vehicles has dropped drastically,” noted PitchBook, with the number of new funds launched this year looking like it has it’s the lowest since 2013. However, as with the startups themselves, there are signs, at least for now, that the capital is still there for the more promising companies in this space: Overall, larger funds raised €7.4 in the quarter, unchanged from last year.
In all of this, Felix’s fund underscores that there are still some very important exceptions to these trends, as well as some potential encouraging signs of what’s to come in the way of further downturns.
One of those details is that the company invests around a specific thesis, rather than spreading bets too far and wide. That might be tougher when the bottom falls out of that thesis, but just as likely, it means Felix understands his field and can be better equipped to help his startups through leaner times. Another reason is that Felix seems to belong to the group that is still attracting funds, and in higher amounts than expected, even though others might have problems.
Felix’s Court said market sentiment could work in its favor – or at least make the best of what will inevitably be less competitive fundraising and generally slower cycles.
“It’s great to be in the market with new funds now,” he said. “We will be able to work the way we like to work, more fully and with more time and new relationships. We won’t be pressed for time like we used to be.”
The company made some notable new hires at the end of last year Win ex-Facebook managers Julien Codorniou and Susan Lin as partners. Adding to this mix are two other female investors, María Auersperg de Lera and Sophie Luck, as well as three new advisors, Maria Raga (CEO of Depop), Musa Tariq (Senior Marketer at brands like Apple, Nike, Ford and Airbnb) and Branko Milutinović (founder and CEO of the games company). Northus).
Felix Capital closes fourth fund at $600M, its biggest yet – TechCrunch Source link Felix Capital closes fourth fund at $600M, its biggest yet – TechCrunch