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Tuesday, May 18, 2021

London’s Stride VC raised second $138.6M seed fund, hunts for third partner – TechCrunch

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Stride VC, a London-based seed investment fund, has raised its second fund, which will be £100 million ($138.6 million) — identical to its first fund. The fund will invest primarily in London startups but also look at select European opportunities.

The breakup of the LPs in the fund is 10% fund of funds, 60% other institutional, 28% family offices and 10% individuals. Stride said some 80% of this new fund came from returning LPs, and 20% from two new unnamed institutional investors. Stride does not have any public or government investment.

Investors include the founders of Cazoo, King, PillPack and Dott, and institutional investors such as Delin Ventures, Draper Esprit, Mubadala and CNP (Groupe Frere).

Stride founder Fred Destin told me that while the fundraising was planned for June, the two new unnamed institutional investors “reached out in January, and confirmed their intention to invest around mid-February after a quick diligence process. We weren’t planning to raise until June. We secured all allocations March 12 and closed 31 March. Breakneck speed for a fund,” he said.

Stride has also gone through some personnel additions. The successful podcaster about VC, Harry Stebbings, who co-founded Stride with Destin, departed amicably in early February to set up his own fund. Cleo Sham is the new partner joining full-time in June, as announced on Twitter. In August last year it lost its Paris-based partner, Pia d’Iribarne, who has set up Newwave.vc.

Destin also told me he will be looking for a new third partner for the fund, and two more team members: “I’m mainly looking for exceptional talent. If they don’t fit some kind of mold, or don’t have an MBA and speak like MBA people, even better. What I mean is I don’t want people who just look for your references.” But, he added, “don’t @ me on Twitter about it!”

Shane Burgess has joined to head up talent; Pietro Invernizzi, formerly of The Family, runs the “First Check Programme”.

Destin says Stride remains “firmly committed to seed”, usually leading or co-leading a funding round. But that it will also expand from pre-seed funding with £250,000 checks to sometimes larger investments in companies like Huboo, where it invested £4.5 million. Its core investment program ranges from £750,000 to £4 million (usually £2 million) and lower rounds from £250,000.

Destin describes the fund as “artisan venture capital” where it invests in “small batches”. He said: “We understand startups are chaotic and we embrace the chaos. We value trust over everything else. We are not about control; we’re about impact. We’d rather do the work than talk about it, hence the minimal website.”

Over a call, he added: “We don’t take board seats, we prefer to provide something to the founders that’s meaningful to them. So we’ll do ad hoc things, such as a strategy session, help them recruit someone, pointed interventions. The founders seem to really like it.”

Stride’s Fund I has backed 29 companies so far. Perhaps the best known is Cazoo. Although much of its portfolio is undisclosed and defies “themes” it’s known to have invested in:

  • API Infrastructure: STRAPI, Impala, WeGift
  • E-commerce: Cazoo, Front of the Pack
  • SaaS: SEDNA, Cord, Unibuddy

Destin told me: “We don’t necessarily think it’s helpful for companies to be announcing what they do and what they’ve raised. And for ourselves, we don’t need it to flatter our ego. A lot of our companies are happily operating below the radar.”

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