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Connect Ventures outs $80M third fund to back ‘product-led’ seed-stage founders

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Connect Ventures outs $80M third fund to back ‘product-led’ seed-stage founders

Connect Ventures, the London-based seed-stage VC that was an early investor in Citymapper and Typeform — and extra just lately backed scaling startups akin to Curve and TrueLayer — is asserting a brand new $80 million fund to proceed investing in “product-led” founders.

Backing the brand new fund is a mix of present and new LPs together with Top Tier Capital Partners, Isomer Capital, the U.Okay. taxpayer’s British Patient Capital, De Agostini, Big Society Capital, Draper Esprit and Korelya Capital. Connect’s final fund, raised in 2016, was round $62 million based mostly on at present’s trade charge, so it is a barely bigger quantity of deployable capital.

Launched again in 2012 when there was nonetheless a really restricted provide of institutional capital at seed-stage in Europe (and when seed cheques have been typically known as Series A!), Connect Ventures is pan-European and invests in B2B and shopper software program classes together with SaaS, fintech, digital well being and “future of labor”.

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Running all through the agency’s funding thesis is a product focus, with the idea that “product-led, software program entrepreneurs” are the sorts of founders most probably to remodel the way in which we stay and work at scale.

You can see this digital product bent all through lots of its portfolio corporations. For instance, as B2B SaaS corporations go, Typeform is about as product-focused as they arrive. More clearly, shopper fintech performs akin to finance app Emma, and all-your-cards-in-one app Curve, additionally stay and die by their respective apps — a theme that can proceed going ahead with this third fund.

“We’re occupied with constructing long run relationships with founders who’ve the obsession and focus required to construct product-led corporations, and the ambition to construct class leaders,” says Sitar Teli, common companion at Connect Ventures, in a press release.

One different notable factor about Connect Ventures is that it has at all times and continues to do fewer offers per 12 months than many seed-stage companies — so-called “conviction investing”, as it’s typically referred to at present. In different phrases, the other to a sprig ‘n’ pray method that favours diversification. That means not solely inserting larger (and due to this fact riskier) bets in a smaller variety of early-stage corporations, but additionally throwing extra assist behind these investments, together with taking a board seat, in a bid to assist tip the scales in the direction of success.

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“We’ve deliberately created a low quantity, excessive conviction, excessive assist funding agency to again these founders,” provides Teli. “That’s why we’ll be focusing on the identical curated variety of seed investments with this fund, utilizing the bigger fund measurement to offer the appropriate capital and assist on our journey collectively”.

On that notice, Connect says it has already began deploying this fund with current investments. They embrace BSit (the subscription-based childcare and babysitting platform), Oyster (the distributed expertise enablement platform), and, as already talked about, fintech Emma.

Alongside Teli, Connect Ventures’ two different common companions are Pietro Bezza and Rory Stirling (see TechCrunch’s earlier protection of Stirling’s recruitment). The agency has backed over 50 startups thus far.

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