GoStudent and wefox backer Speedinvest has just announced €500m in new funds to back European tech startups — €300m for its fourth pre-seed and seed stage fund and €200m to invest more in existing portfolio companies.
It’ll write cheques ranging from about €600k for pre-seed companies and up to €2.5m for seed-stage companies and back about 100 new startups with the early-stage fund.
Sifted caught up with CEO and managing partner Oliver Holle to talk about his model for scaling a pan-European VC firm and how he’s built an internal M&A team given the worsening economic and market outlook.
The impact of the slowdown on Speedinvest and its portfolio
Holle doesn’t mince words talking about the outlook of the market. “I am worried about our founders,” he says. “Many of them are not resilient enough to weather this.”
He’s lived through market turmoil before, during his experience as an entrepreneur during the first tech bubble in the early 2000s.
“I stayed in my company way too long. I should have actually shut it down and started something new. I want to avoid that kind of fate for many of our founders,” he says.
To support startups struggling in the current downturn, Speedinvest now has a team of three M&A specialists internally, “helping find strategic exits maybe a little bit quicker than [startups] would on their own”. Those experts are not on the investment team but work closely with that team. Its members have finance or business development backgrounds.
“We always had one person within Speedinvest doing [M&A], but we doubled down on it because it's obviously a topic that will be front and centre for the next 24 months,” he says.
Two thirds of the fresh capital raised by Speedinvest is coming from existing LPs — limited partners, the investors in a VC fund — including US VC firm New Enterprise Associates (NEA) and the European Investment Fund (EIF).
Holle says that bringing on new institutional investors was difficult for several reasons. First, some LPs had to put VC investing on pause as a fall in public share prices pulled down the value of that portion of their portfolio, leaving the share of VC higher than they would like. US LPs also turned cold, he says.
“We had the first conversations very late last year and early this year. I felt like there was a lot of interest from US LPs to come to Europe. It felt like they finally made up their mind,” he says. “This category of LPs walked away very quickly after the war [in Ukraine] started.”
One major new LP that did join in Europe is French sovereign wealth fund Bpifrance.
'Just these Austrian dudes' to €1bn+ in AUM
European VC has traditionally been pretty siloed, with few large, pan-European players, but Holle says Speedinvest has been able to expand geographically by focusing on specific sectors. The firm has offices in Berlin, London, Munich, Paris and Vienna.
“People told us, ‘Why would anyone want to work with you guys? You’re just these Austrian dudes’,” Holle remembers when Speedinvest started investing in London about five years ago.
But he says the firm was able to gain a foothold in the UK capital — Europe’s largest tech market — on the back of its fintech portfolio and fintech investors. It’s since replicated that playbook by building out sector-specific teams and building “a portfolio with a couple of big winners that actually showcase that you can do it” in each sector.
It’s now got six dedicated vertical teams, in deeptech, fintech, health, marketplaces and consumer, industrial tech and SaaS — all of which can make investment decisions into new portfolio companies autonomously. (Follow-on investments require investment committee signoff.) The sector teams get individual budgets based on factors like how big the team is and how big the market opportunity is.
It also hired angel investor Deepali Nangia earlier this year as partner to scout for female founders and work across all those sector teams. The Speedinvest investing team is 37% female overall and 24% of investment partners are female.