Eight Roads Ventures, the proprietary investment arm of Fidelity International, is officially launching its new European fund today.
Targeting scale-ups in Europe and Israel, ‘Eight Roads Ventures Europe’ will have $375 million in capital to deploy, mostly at the Series B and Series C stages but also in scale-ups that although bootstrapped have found market fit and traction and are in need of growth capital.
It plans to back a total of 15 to 20 companies, with an average investment size of between $10 million and $30 million, and will invest right across the region. Eight Roads Ventures also plans to remain sector agnostic, although enterprise, consumer, fintech and healthcare IT are name checked as markets of particular interest.
“The strategy continues to be to find European scale-ups — and by Europe we mean Europe and Israel — and help them become global winners,” Davor Hebel, Managing Partner and Head of Eight Roads Ventures Europe, tells me during a call.
“We are very excited about the health of the European ecosystem. We see more and more best young talent deciding to choose their career in entrepreneurship, and we see more and more early-stage funds popping up in different regions. And our strong belief is that there is no one place where great European companies are going to come up”.
Describing Europe as “truly the most scattered and distributed geography,” Hebel cites recent Eight Roads Ventures investments in companies founded in Hamburg, Malmo, Tel Aviv, and Paris, not just the most popular hubs of London, Berlin and Stockholm. “The real focus is to find great companies no matter where they are and to help them scale up from, typically, thirty to fifty employees to five hundred or one thousand employees,” he says.
Scaling up is also where Eight Roads Ventures sees a “resource gap” in the European market. This includes a big difference in the amount of growth capital available to companies in the U.S. compared to those in Europe. However, it’s not just money, but also a gap in knowledge of how to scale.
“This is where we want to bring our growth tool kit, and help companies around things like scaling sales and marketing, and expanding internationally, building layers of management, all the things that European companies are looking to do as they become globally and regionally successful,” says Hebel.
Talking specifically about the VC firm’s interest in fintech and healthcare, the Eight Roads Ventures Europe boss notes that a generation of technologies are moving into “pretty regulated industries” and that while this has major challenges it also brings a lot of interesting opportunities.
“One of the big raw materials is great entrepreneurship,” he says, and that to transform a highly regulated market you need people who can really shake things up. This is already happening in fintech with challenger banks going after opportunities “where it’s still early days but the ultimate prize is pretty big,” and we’re now starting to see the same thing in healthcare.
“Ten percent of the world’s GDP goes on healthcare spend, yet we feel like we can still do much better in terms of both preventing and then curing different diseases,” adds Hebel.
Meanwhile, since launching its first standalone European fund in 2010, Eight Roads Ventures has backed over 20 companies in the region. They include AppsFlyer, Compte Nickel, InnoGames, Made.com, Neo4j, Treatwell and Wallapop.