2014 was the year of seed funding, 2015 will be the year of late stage funding for Partech Ventures. The French venture capital firm just raised $240 million to launch the Partech Growth fund. This new fund will back late stage startups in Partech’s traditional industries and areas. But this time, the firm will invest between $12 million and $50 million per round.
Three new general partners joined Partech to head the effort, with Omri Benayoun and Bruno Crémel handling France-based startups and Mark Menell staying in the Silicon Valley to invest in American startups and help the rest of the portfolio. The existing Partech team in Berlin will now handle the company’s German deal flow at every stage, from seed to growth.
And this is key to understanding how Partech Growth will work. While the company will be looking for investment opportunities in the U.S. and Germany, most of the investments will be in French startups looking for a last round of financing. Then, the Partech team will help its portfolio companies expand to the U.S.
This way, it will be much easier to find an exit as the most logical end game for French startups is still in the U.S. French public companies still need to up their game when it comes to merging and acquisition offers. Other big French startups might follow in Criteo’s footsteps — the French company successfully went public on the NASDAQ.
Building a bridge between France and the U.S. is a good temporary fix to get better returns on investment. I’m optimistic that things might change over the next 10 years. Yet, in the meantime, VC firms must go where the money is for late stage startups.
Partech will compete directly with other big European VC firms, such as Index Ventures, Accel Partners and Balderton Capital. These firms all have massive funds to be able to lead mega-rounds. They also all have team members sourcing deals in France. Evidence of this lies in BlaBlaCar’s impressive $100 million round. These efforts were already a breath of fresh air for the French tech ecosystem when it comes to funding.
Partech’s co-leaders Philippe Collombel and Jean-Marc Patouillaud emphasized the importance of today’s new fund to close Partech’s own funding gap. “With Partech Growth, we could have invested in French companies that were too big when we looked at them, such as Criteo,” Patouillaud told me in a meeting before the official announcement. Index, Balderton, Accel, Partech and the other VC firms who are looking at French startups have all greatly contributed to closing France’s funding gap over the past two years.
In 2014, Partech’s small seed fund headed by Romain Lavault has closed one investment every two weeks on average. The team also recently opened a coworking space for its portfolio company — the Partech Shaker (pictured above). The most recent early stage fund is also showing some interesting results already with TripAdvisor’s acquisition of LaFourchette for roughly $140 million. Now that Partech can make a handful of bigger investments per year, I can’t wait to see the first investments of Partech Growth.
The limited partners behind Partech Growth are Bpifrance, CNP Assurances, AG2R La Mondiale, Carrefour, Ingenico Group, Renault and more. But that’s not all. Partech is still raising another $120 million (€100 million) for Partech Growth. The final result will be a good-looking $360 million growth fund.