Earlybird Digital East — the VC firm known for making one of European tech’s most successful bets, by leading Romanian unicorn UiPath’s $1.6m seed round in 2015 — is spinning off from the Earlybird family, Sifted has learnt.
In the next few months, the Digital East fund — which Sifted estimated made as much as a 2,200x return on its UiPath investment when the company went public for $1.3bn in 2021 — will rebrand and cut ties from the Berlin-HQd Earlybird Venture Capital, according to a source with knowledge of the decision.
Cem Sertoglu, managing partner at Earlybird Digital East, confirmed the move to Sifted over email. He said in a statement that “starting in the autumn of 2024, Digital East Fund will no longer be a part of the Earlybird family of funds,” adding that it will continue to operate separately (as it has been) and “our structure, team, and strategy will not change”.
Digital East, which last raised a $242m fund in 2021 and shares roughly 10% of its LPs with Earlybird Venture Capital, the fund confirmed, will continue to invest in early-stage companies in central and eastern Europe. Sifted understands Earlybird Digital East, which will soon have a new name, is not currently raising a new fund.
Earlybird Venture Capital confirmed the move to Sifted. In an interview, Hendrik Brandis, cofounder and partner at Earlybird Venture, told Sifted that Earlybird and the Earlybird Health fund, which have also been operating separately, will now be more integrated moving forward and will be sharing some administrative functions, services and costs like investor relations and finance, as well as carry. Of the split with Digital East, Brandis said that "this is always the tradeoff; these collaborations are at-will and you either take the pain of having to align on various things, or you go for independency and giving up potential synergies which may arise from being under one roof. At some stage, they took the decision that they would rather maintain independency." One partner from Digital East, Dan Lupu, will remain with Earlybird Venture Capital, according to the firm.
Earlybird Digital East’s seed investment in UiPath shot the fund to VC fame. Sifted understands it returned $2.3bn in capital on a $150m fund raised in 2014 — making it one of the top-performing VC funds in Europe.
Its portfolio also includes Bulgarian spend management platform startup Payhawk, valued at $1bn in 2022, and recent bets on smaller startups like Proofs, a startup founded by Polish ElevenLabs angel investor Bartek Pucek.
Digital East has a roughly 20-person team based in Istanbul, London and New York, which operates independently of the Berlin-based Earlybird team. Since 2013, it has had a brand licensing deal with the German Earlybird. Digital East and Earlybird share a small amount of carry, Digital East told Sifted. The funds have also had separate general partners.
The move comes at a time when VC firms are shaking up their firms and brands. In the US, big firms like Sequoia Capital and GGV Capital have separated from their China-based arms in the last year as geopolitical tensions have escalated. Meanwhile, in Europe, VC M&A is also picking up; General Catalyst merged with Berlin-based VC La Famiglia in 2023, while UK firm Molten Ventures acquired fellow VC Forward Partners late last year.
Update, Aug. 22, 2024: This story has been updated with a quote from Earlybird Venture Capital's Hendrik Brandis. It was also updated to clarify details of the future relationship between Earlybird Venture Capital and the Earlybird Health fund.
