Amid rising uncertainty about how financing will look for tech in the months and maybe years to come, one of the newer kids on the VC block in Europe is closing its largest fund to date. Felix Capital has raised $600 million. It plans to use the money to continue investing in its sweet spot of commerce-driven startups, complemented by businesses building tools to help run those, as well as the future of work, which includessustainability, too.
Felix believes that the collective experiences of its investors will help carry it through times that are more challenging for the world of startup finance and growth.
Court said in an interview that he had lived through two downturns. I spent a lot of time undoing what had happened before. We wouldn't do that now because of the complex terms. They came in with a short-term-gains mentality for all the money that came in very quickly. It takes a long time to build a great company in our business. You cannot over-accelrate a brand on the consumer side.
Felix has a portfolio of companies that have gone public, including Farfetch and Deliveroo. Felix invests in both the early and growth stages. The plan is to double down on existing bets as well as bring more companies into the fold.
The total managed by Felix will be increased. It is a huge leap from the $120 million the firm launched with in 2015. The original goal was $500 million, according to the court.
The existence of the fund and the fact that it exists are notable in their own right, but are perhaps even more so given the current state of things in the market.
The tech world is going through a tough time when it comes to finance after a number of years of record-breaking numbers. It's a market correction, or something more directly related to any number of economic, political and social shifts, but many are preparing themselves for a moment where money will simply not flow as freely as it did before, not from investors, and possibly more worryingly, not from customers.
You might think that some of that is happening in the more immediate sense. European VC deals were still on pace with the same quarter a year ago, according to the most recently quarterly overview of VC activity in Europe by PitchBook. The UK was the largest market within that.
If you believe in the trickle-down theory, there are signs on the way.
In number and valuation, exits have fallen off a cliff. The sell-off in the public markets had a knock-on effect on potential IPOs as well as growth rounds and even smaller and earlier rounds down the line. In that quarter, there were over 100 M&A deals worth over 5 billion. Just 16 public listings took totalling 1.9 billion in value.
The signs are that we are on the verge of some important consolidation. The number of European VC vehicles fell dramatically after years of star investors striking out on their own and launching their own funds.
Felix's fund shows how there are some key exceptions to these trends, and also some encouraging signs of what will carry through more bearish times.
One of the details is that the firm doesn't spread bets too far and wide. If the bottom falls out of that thesis, it's likely that Felix can be better equipped to help its startup through leaner periods. Felix seems to be among the group that is still getting funding at a higher than expected amount.
The market climate could work to its advantage, according to Felix's Court, because it will make the best of the situation of less competitive fundraises and slower cycles.
He said it was great to be in the market. We're going to be able to operate the way we want to, with more time, and with new relationships. We won't get as much time as we used to.
At the end of last year, the firm made some notable hires, including ex- Facebook executive Julien Codorniou and Susan Lin. There are two more female investors, Mara Auersperg de Lera andSophie Luck, as well as three new advisors, Maria Raga (Depop CEO), and Musa Tariq.
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