June 26, 2023

Pigment, Payfit and Owkin-backer Frst has closed €72m of third fund

Investors in Frst's new fund include the European Investment Fund, Bpifrance, Axa Venture Partners, Isomer and Mubadala, along with numerous founders

Amy Lewin

4 min read

Frst, the Paris-based VC firm that counts companies like Pigment, Payfit and Owkin in its portfolio, has closed €72m of its third fund to back French founders. Frst hopes to close the fund at €100m. 

Investors in the fund include the European Investment Fund, Bpifrance, Axa Venture Partners, Isomer and Mubadala, along with numerous founders. Around 90% of Frst’s institutional investors have reinvested. 

The plan is to invest the capital over four years, into 30 seed-stage companies in any sector, writing cheques ranging between €1m-3m. 50% of the fund is reserved for follow-ons. 


Fundraising in 2023 

It took Frst around nine months to reach a first close. 

“There’s a lot of wait and see” among LPs who might be deploying for the first time in a certain fund — as many are stretched by needing to “re-up” in other firms that deployed their capital quicker than expected over the past few years, says Bruno Raillard, cofounder and managing partner at Frst. 

“But we’re buoyed by the fact that experienced LPs know that in a market downturn you get some of the best VC vintages.” 

Between now and the final close of the fund, Frst hopes to bring onboard more sovereign wealth funds, fund-of-funds and asset managers. These types of investors are more and more interested in backing early-stage VC funds, says Raillard, after having been burned by investing in growth-stage companies in the boom days of 2020 and 2021 and being left high and dry by meagre returns since. 

Where LPs choose not to invest, it tends to be down to their “level of conviction on France” (this varies among investors, says Raillard) or their level of conviction in the brand Frst is building and why founders would choose the firm. “But each year [that] becomes clearer — and they get more founders to talk to,” he says.

Avoiding FOMO 

Frst has had AI companies — like drug discovery platform Owkin and legal intelligence platform Doctrine — in its portfolio since the last time AI was in vogue, and Raillard says the team is leaning on this network to figure out what’s hype and what’s not in Frst’s current dealflow. 

The team does, however, pride itself on moving fast, he says; getting deals done in just a few days if needs be. “One of our core values is speed; meeting founders quickly, and making a decision fast. That’s crucial to win deals, and give respect to founders.” 

Take Pigment, the buzzy Paris-based SaaS company. Frst had known co-CEOs Eléonore Crespo (formerly an investor at Index) and Romain Niccoli (also cofounder and CTO of French tech success story Criteo) for a while, so when Crespo said she was working on the company, the team invited her in to pitch. “After 30-45 minutes, we said ‘wait here’, went out — and came back with a term sheet,” Raillard says. “Our knowledge of them and their dynamic and the problem they were tackling convinced us.” 

Frst invested in Pigment’s seed round in 2019 and Series A in 2020. Earlier this month, the company raised an $88m Series C led by US VC Iconiq — reportedly at a very high revenue multiple.

It’s true it’s high, Raillard says — revenue is currently in the low double digits — but he thinks the company merits it. “With this type of company and the quality of the team, we think it will be a category leader, with a €10bn-30bn market cap — so we’re not concerned about the revenue multiple currently. It has insane traction — so we think it will grow into [its valuation].

“Top-tier VCs have come in, liked what they saw, looked under the hood, liked it even more, and said we want in, at whatever price."


The hard stuff 

Frst’s backer Bpifrance has an ambitious plan to boost France’s deeptech ecosystem. 

That’s all great, says Raillard — but there still aren’t enough founders tackling the biggest problems.

Take climate tech: “Lots of founders want to ‘do’ climate — but most don’t do the hard stuff. They do software instead.” 

“There’s a far smaller proportion of founders with the ambition to build something in deeptech — and you can’t hack ambition.” 

Raillard would like to see more companies like Bordeaux-based Dioxycle, which has developed technology which can turn CO2 into everyday products like fuel, plastics and synthetic fabrics. Frst was keen to invest, but lost out to US climate fund Lowercarbon, he says.

Raillard is bullish on French talent more generally, however. Several French startups — like Qonto (not a portfolio company), Owkin and Pigment — are turning into magnets for talent, he says. “And high-quality talent attracts more talent.”

Amy Lewin

Amy Lewin is Sifted’s editor and cohost of Startup Europe — The Sifted Podcast , and writes Up Round, a weekly newsletter on VC. Follow her on X and LinkedIn