The German VC firm is announcing the closure of its second fund, totalling €140 million, to be invested in early-stage European technology startups. In addition, Project A is closing in on a separate new €40 million fund for follow-on investments in its portfolio companies.
Dr. Florian Heinemann, founding partner at Project A, tells me the new fund will be targeting investments ranging from €300,000-€5 million, up to €10 million in a single company over several rounds.
Specifically, the VC is on the lookout for European startups operating in “consumer internet and digital infrastructure, in particular marketing technology, and B2B-centered marketplaces”. Another area that Project A is starting to look at and invest in is “digital health and industry 4.0-related topics,” he says.
Notably but not unsurprisingly, the biggest LP in Project A’s second fund is the tax payer-funded European Investment Fund, along with existing investors Otto Group, and Axel Springer. A number of German companies and entrepreneurial families have also invested, including Jahr, Haniel, Ravensburger, and Oetker.
Individual LPs include Rolf Schrömgens (co-founder and CEO of Trivago), Rene Köhler (founder and CEO Internetstores), Holger Hengstler (co-founder dress-for-less), and Brian O’Kelley (founder and CEO of AppNexus).
Asked what’s changed since Project A launched its first fund in 2012, Heinemann says that the ecosystem has become more diverse in terms of the types of business concepts being proposed, sources of angel and VC investment, and who is starting companies.
He also says that founders have developed a more sophisticated view of “how to create and run great companies and show a lot more ambition in doing so”.
Additionally, the funding market has changed into a “founders’ market”, says Heinemann, which means that good entrepreneurs can choose their investors.
“Therefore, there is more need now to rethink your positioning as an investor. That’s why we think that the operational support we provide, while keeping the entrepreneur in the driver seat, is well-suited to the market going forward,” he adds.
That “operation support,” of course, is something that Project A heavily focuses on. It says it employs “a unit of 100 specialists” in areas such as software engineering, digital marketing, business intelligence, sales, design, and recruitment.