Paris-based Varsity VC, a brand-new seed investor founded by banking veteran and ex-Société Générale deputy CEO Didier Valet, has closed a first €75m for its first fund, targeting €150m.
It will make seed investments in Europe across four verticals including fintech, healthtech, climate tech and enterprise software, writing €500k-€6m tickets.
Valet, who left Société Générale in 2018 after almost two decades at the French multinational bank, has since done several angel investments in high-profile French fintechs such as Alma, Pennylane and Qonto.
He partnered up last year with Kamel Zeroual, former partner at French early-stage VC Serena, and Florent Thomas, former operations manager at the same firm, to found Varsity. The team plans to have met the fund’s final target by Q2 2024.
Who will Varsity back?
Varsity is a generalist fund, but Valet’s track record means that it is naturally skewed towards fintech — even as the sector undergoes brutal readjusting in the midst of the downturn.
2023 has been a bruising year for the sector as investors turned their attention to startups in other areas like climate tech. In the UK, funding for fintech startups fell by 72% in 2023 — a similar drop to fintech funding across European tech as a whole.
“We can’t say that it was easy to fundraise,” says Valet. “The context is apprehensive.”
“Fintech is less of a growth market at the moment. You have to find the right teams and the right ideas.”
The VC has already backed five startups including French fintech RockFi, which focuses on wealth management, energy optimisation startup Sensinov and ocean freight company Pharaday.
With this first fund, Varsity plans to back up to 30 companies. Two-thirds of the fund will be kept for follow-ons through Series A and B, and even C in some cases.
A new seed player
Varsity is yet another player in France’s fast-growing and increasingly competitive seed investing landscape.
For example, Paris-based Frst recently closed €72m of a target €100m seed fund; Newwave VC is deploying a €80m fund; and Emblem launched last year, targeting a €75m European seed fund.
“There is a lot of competition but with €150m, we will be positioned as one of France’s largest seed funds,” says Valet.
Who are Varsity’s LPs?
The fund is backed mostly by institutional investors like public bank Bpifrance and insurance companies MACSF, Sogécap and Crédit Agricole Assurances.
But going forward, the VC sees a big opportunity in retail investors — nonprofessional individuals who invest their own money through brokers, banks or a mutual fund.
Varsity has partnered with asset management company Elevation Capital Partners to create a feeder fund that will support the VC’s second closing.
“[Elevation Capital Partners] will commercialise our fund to a client base of retail investors,” says cofounder Florent Thomas.
“We know that the whole industry will be addressing the retail investor population in the next decade, and we will too as we raise more funds.”