Nauta Capital closes out $170M third fund


Image Credits:

Early stage VC firm Nauta Capital, which has offices in London, UK, Barcelona, Spain and Boston in the US, has closed out a 2016 fund raising — capping it off at $170 million.

The firm has already closed eight investments with this fund, which had a first closing at $70M, with a further $100M added in parallel — now closing oversubscribed vs the original target for the fund of around $120M, according to general partner Carles Ferrer. (Its prior funds were $55M raised in 2006, and $115M in 2010.)

Nauta has a focus on what it describes as “capital-efficient Series A software propositions”: aka startups that take a leaner approach to taking on funding vs money-gobbling wannabe unicorns. Its areas of tech interest include b2b software, digital media and “enabling technologies” for mobile and the Internet — with an overall focus on large markets with “limited previous technology impact”.

“We believe the VC model has been lately too centered around the Unicorn concept, that is too many times return-unrelated,” Ferrer tells TechCrunch. “Too many companies are pushed to grow more and more but too early, and for that, raise too much money, again too early. Many of them don’t have enough evidence from the market to know if they should be spending so much money.

“If it happens to be too early, that company may end up wasting so much money and energy and having a conflict between equity raised, valuation, and its performance. This too often results in good companies that are actually severely damaged by a poor funding strategies.”

Ferrer argues that the risk for startups raising too much too soon can be especially “delicate” in the b2b sector — describing the firm’s philosophy for startups here being “lean for a good while is beautiful”.

Too many companies cannot make good money for their investors unless they become a semi or full unicorn and we think this is wrong.

“Once you have enough proof, then it is time to run, but not before. By being lean you maximise chances to obtain premium multiples for yourself and entrepreneurs, at any exit valuation. Too many companies cannot make good money for their investors unless they become a semi or full unicorn and we think this is wrong,” he adds.

Staying away from risky unicorn bets is also pragmatic, given falling startup valuations and the clutch of down rounds in recent years. Albeit, investors in Europe do typically ask to see a clearer path to monetization earlier vs their Silicon Valley counterparts.

The 40+ startups in Nauta’s portfolio thus far include companies like Brandwatch, Fizzback, GreatCall, Eyeview Digital, Scytl, Basekit, ForceManager, Marfeel, Getapp, Privalia (which exited to Vente-Privee last year) and Social Point (which exited to Take-Two earlier this year).

While the investments the firm has made most recently, with the 2016 fund, are: in the UK and Ireland: CloudIQ, BeMyEye and ChannelSight; in Spain: Nextail, Geoblink and Lodgify, and in the Boston area: Content Raven and Connected2Fiber.

It says it plans to invest in around 25 companies in total with the fund — mostly at Series A level, though Ferrer notes there “may be a reduced number of earlier deals (A minus) when we know very well the entrepreneur”. He says the firm typically invests between $1M and $7M per startup, but describes “the sweetspot” as “usually as a first ticket $1M to $3M”.

What makes a team catch the firm’s eye? Responding on this he describes its investment thesis as “very disciplined”, saying: “We only do what we understand very well and try to stick to it. Capital efficiency is a concept our entrepreneurs believe in also very passionately.”

Overall, he says the approach is to look for industries that have not been disrupted and then pick “the best companies to do it”, citing a couple of startups it’s backed (InCrowd, BeMyEye) that are aiming to disrupt the “huge and inefficient market research industry”, for example.

In terms of geographical spread, Nauta has full investment teams in its three locations, and Ferrer says from London it’s able to cover the whole of the UK and Ireland plus “other continental European countries where companies are born and naturally migrate to London as a hub”; likewise covering Spain and Portugal — and looking further north into Europe — from its Barcelona base.

“We look at other geographies in Europe when companies migrate to our hubs, or have a special interest on our geographies (where we have a team). Eventually, we can learn enough from those geographies to probably in the future invest more actively there too. We think it is so important to have an investment team based where the dealflow is originated. We also have a Boston presence where we cover the east coast and also help European companies migrate,” he adds.

Nauta’s current fund has been backed by a group of international investors, based in the UK, Continental Europe, Latin America and China, which it says include leading Institutions (Fund of Funds, Financial Institutions, Insurance Companies, Endowments and government agencies) and large Family Offices.

Photo: From left to right, general partners Jordi Vinas, Dominic Endicott, Carles Ferrer and Daniel Sanchez

More TechCrunch

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

1 day ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

1 day ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities

For Mark Zuckerberg’s 40th birthday, his wife got him a photoshoot. Zuckerberg gives the camera a sly smile as he sits amid a carefully crafted re-creation of his childhood bedroom.…

Mark Zuckerberg’s makeover: Midlife crisis or carefully crafted rebrand?

Strava announced a slew of features, including AI to weed out leaderboard cheats, a new ‘family’ subscription plan, dark mode and more.

Strava taps AI to weed out leaderboard cheats, unveils ‘family’ plan, dark mode and more

We all fall down sometimes. Astronauts are no exception. You need to be in peak physical condition for space travel, but bulky space suits and lower gravity levels can be…

Astronauts fall over. Robotic limbs can help them back up.

Microsoft will launch its custom Cobalt 100 chips to customers as a public preview at its Build conference next week, TechCrunch has learned. In an analyst briefing ahead of Build,…

Microsoft’s custom Cobalt chips will come to Azure next week

What a wild week for transportation news! It was a smorgasbord of news that seemed to touch every sector and theme in transportation.

Tesla keeps cutting jobs and the feds probe Waymo