The historical trajectory of venture capital has been to move to earlier and earlier finding rounds in order to capture the greatest potential multiple on exit. In the U.S., we’ve seen an explosion of pre-Series A funds, and similarly in Europe. But there’s been an opportunity to tie a lot of that activity together and also produce data that can feed into decision-making about growth rounds further up the funding pipeline. Now, newly formed Aldea Ventures intends to do just that.
Today’s it’s announcing a €60 million first close of its Pan-European fund with the aim of reaching its target €100 million first fund. The idea is ambitious: to invest in 700 startups across Europe, but with an unusual, “hybrid” strategy. First up, it will operate as a fund of funds, investing in up to 20 early-stage “micro VC funds” across Europe. Second of all, it will act as a co-investment platform from Series A upward. So far it has invested in London-based Job and Talent and most recently, Copenhagen-based Podimo.
The model is more common in Silicon Valley than in Europe, although it does exist there. Fund-of-funds in Europe include Multiple (since 2013), Isomer Capital and Draper Esprit. But Aldea Ventures hopes to capitalize on this trend. Aldea is also effectively stepping into the gap where corporate VCs in the U.S. would normally fill, but in Europe is generally a gaping hole.
Aldea Ventures is led by managing partners Carlos Trenchs, formerly at Caixa Capital Risc; Alfonso Bassols, previously at Nauta Capital; Josep Duran, formerly with the European Investment Fund; and Gonzalo Rodés, chairman. Aldea Ventures is partnering with Meridia Capital, a leading Spanish alternative investment fund manager.
Carlos Trenchs, managing partner of Aldea Ventures, said: “We believe Europe will continue to grow in influence and play an integral part in the next decade of technology … Our dual model as a fund of funds and co-investor into scaleups is the first of its kind in Europe. Seen only in Silicon Valley until today, we’re putting this model to work to fuel the next generation of growth across the European ecosystem.”
Aldea will look for five factors to selecting micro VCs: the firm’s thesis (specialist, thematic or generalist); location (pan-European or local); the experience of the partners; the size of the fund; and whether the fund is emerging or established. The fund will also take a long hard look at AI, blockchain and deep tech companies.
Trenchs explained to me during an interview that “we will have exposure to seed capital in different geographies with the 700 companies, and we reserve the other half of the fund to invest directly on the growth stage in the best performers in their portfolios.” This, he says, will establish a roadmap from direct investing all the way up to later-stage rounds.
Aldea has so far made investments into six micro VCs; Air Street Capital and Moonfire in London; Helloworld in Luxembourg; Inventures in Munich; Mustard Seed Maze in Lisbon; and Nina Capital in Barcelona.
Nathan Benaich, founding partner of Air Street Capital, commented: “Investing in European AI-first companies is a huge opportunity, with almost one-quarter of top global AI talent earning their university degrees here. Our partnership with Aldea demonstrates a shared conviction that specialist managers with deep sector-specific knowledge will accelerate the success of tomorrow’s category-defining European companies that are AI-first by design.”
There’s clearly also a data play here because Aldea is likely to end up with a lot of data across companies, sectors and also across various stages.
And that was confirmed by Trenchs: “We want to make the VC world more transparent. If you have the 700 companies, in a few years from now, we’ll be able to collect a lot of data about what’s going on at seed stage in European valuations, geographies and sectors. Our intention is of course to use it as intelligence.” He also said the firm intended to share a lot of anonymized data with the wider European ecosystem.
“There is a funnel of few thousands of companies that get funded, but only a few make it through the funnel. As investors, we are looking for venture capitalists that can transform their seed portfolio into a portfolio that graduates from Series A to Series B,” he added.