Draper Esprit announce £160 million of permanent capital to invest in Europe’s most ambitious teams

 
Posted by Isabella Cookson, 02 Jun 2017

Today, we are delighted to announce we have raised a further £160 million to invest in Europe’s best startups. See the official RNS announcement here.

We don’t operate a traditional VC model (with five years to invest and five years to show returns), we have raised permanent capital. The money we are announcing today will be deployed across approximately one year, not five. If you think in terms of a typical five- year fund, this is actually the equivalent of a £800 million ($1 billion) fund. This will enable us to realise our vision of providing long term, patient capital to help the best entrepreneurs build businesses that compete globally.

Why the patient capital model matters for entrepreneurs:

We won’t back out of the business because our investors demand a return within 5 years. This happens more than you would think. The best businesses can take 20 years to build- short term strategic exits should only be pursued if management desire or for market dynamics. It should never be for a lack of scale up capital to support that direction.

  • We don’t need to spend all our time fundraising, we can spend it helping and growing the portfolio. When we make returns, they don’t go to our LPs, they head back to the balance sheet, ready to be re-invested into more excellent startups. We want to help build a sustainable ecosystem in Europe
  • We can follow on. When a brilliant company has to raise a larger round of funding, often their current investors don’t have the capital, or the mandate, to follow on. There has been much written on how scale ups are lacking funding in Europe, compared to the US. We want to remedy that. 70% of this money will be used for follow-on investments.
  • We now have the opportunity to bring in larger rounds from our strategic shareholders, including Woodford Investment Manageement, Baillie Gifford and Invesco Perpetual. If you’re reading this and your business is earlier stage, you might not be thinking about this now, but this will become more important later down the line.

Since our IPO last June we have backed some of Europe’s most exciting companies, including Graze, Trustpilot, Clue, Graphcore, Push Doctor and Perkbox. We will be using this money to continue investing in exciting businesses across hardware, digital health, SaaS and consumer technology at series A and B and beyond.

We have also built out a world class team, who have a history of building global businesses and are dedicated to helping European technology entrepreneurs build leading businesses to change the world. We do what we love, and we can’t wait to meet the next generation of entrepreneurs building the teams, products and services of the future.