German early-stage fund La Famiglia — known for its bets on Personio and Deel — is joining forces with US VC and Airbnb backer General Catalyst.
A rare merger in the VC world, it sees one of the US’s largest and most active investors doubling down on Europe as the global importance of the region’s tech ecosystem continues to grow.
Jeannette zu Fürstenberg, founding partner of La Famiglia, will become managing director at GC, equivalent to a general partner role, and will help build out a global seed investment programme. La Famiglia general partner Judith Dada will become a partner at GC. The deal will be completed in the first half of 2024.
The La Famiglia teams will remain in Berlin and Munich and keep the La Famiglia brand, making GC the first major US VC to have a significant footprint in continental Europe. Most big US firms have tended to only have investors based in London.
“It’s a testament to the incredible talent that we see on the European continent. It’s not about a US partner relocating to London to drive the European strategy. We are European investors that have co-built and championed the ecosystem over many years,” Dada says.
La Famiglia declined to give financial details of the deal, but Fürstenberg says, “We’re not doing this for the financial outcome”. She says the firms will be raising joint funds in the future.
General Catalyst, founded in 2000, opened a London office in 2021 and shares several investments with the German seed fund, including Helsing, Stripe, Applied Intuition, Maven and Ramp. The US investor invests at seed all the way up to growth stage.
Earlier this year, La Famiglia announced it had raised €255m for a third seed fund and a new €90m growth fund — no mean feat in a tough fundraising environment. So why join forces with another fund now?
Fürstenberg says that one attraction was the ability to invest at a scale that it would have taken La Famiglia another decade to achieve in terms of talent and assets under management.
“The question we are asking ourselves is, ‘Do we have another decade right now with everything that’s showing up on the horizon?’”
In addition to software, both partners also pointed to the potential to back companies that would require long-term capital to scale in areas such as climate, industrials and defence, as another impetus for wanting to work with GC.
“We’ve probably reached the end of the SaaS curve. There’s probably going to be a redistribution of market share. If we think about what this next wave of innovation is going to be, it’s probably going to be anchored more in a shift from bits to atoms,” says Fürstenberg, which will mean more investment in hardware or manufacturing.
“If you map these macro trends, it’s so cool to be able to take a 10- or 15-year vision.”