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Draper Esprit are proud to be keeping the UK at the heart of European Venture Capital

Author: Simon Cook

Posted on

Today, despite it being “Blue Monday” combined with the current chaos over Brexit, and the recent technology correction in the public markets, we raised a further £100 million in new capital to deepen our relationship with our European partners Earlybird, to take a meaningful position in their older funds, and to scale up our resources to back entrepreneurs across Europe.

We remain believers in the promise of a connected European continent which includes the UK; one which shares technological progress, entrepreneurial culture, freedom of talent, and new business ideas which can lead the world. Our announced partnership with Hendrik, Christian, Fabian at Earlybird Digital West and our developing relationship with Roland, Dan, Cem and Evren at Earlybird Digital East and the rest of the wider Earlybird team is built on exactly these principles. We are impressed by the Earlybird team’s ability to find the best entrepreneurs at the earliest seed and series A stage as demonstrated over many years with brilliant companies such as Wunderlist, N26, Smava, UI Path, Onefootball and Peak Games.

Since announcing our partnership in July 2018 with Earlybird Digital West, we have worked closely with the team, and together as investors in their latest €175m fund VI, have backed exciting companies such as Movinga, Medidate, Shapeshift, Crossengage, Fraugster, and others. Today, we have furthered this relationship; we have agreed to acquire a stake in the 2007 Earlybird IV fund and a separate stake in their 2013 Digital East I fund, adding to this our own future firepower to the mix, and we have committed to invest in the new Earlybird Digital East II fund.  This will immediately add 19 new companies to our PLC portfolio, continuing to be managed by Earlybird partner’s, including UiPath, Peak Games, Nfon, Socialbakers, Smava, and B2X. By taking stakes in these companies via our Earlybird partners, we extend their runways, ensuring that they have a flexible, long-term capital base while also connecting the public markets to another cohort of fast-growing companies.  We did a similar deal with Seedcamp’s funds I and II about 18 months ago, and have been helping those companies continue to grow.

Partnerships between firms are rare in our industry. But at a time when China is increasingly catching up with the US, Europe and the UK can’t afford to stand still. According to CB Insights and KPMG’s latest report, the Americas invested $102 billion in tech companies, Asia invested $81 billion, while Europe invested $21 billion. Simply put, European and British entrepreneurs need more firepower if they are to compete on the international stage. That is not to say that the market is not growing; last year we saw later stage investments grow by 16.7% in Europe. But it is to say that we cannot be complacent.

The technology industry relies on global connectedness; the flow of trade, of capital and of talented entrepreneurs. Information Technology has long been a globally tariff free industry, and we have been helping our companies to sell their world class technology into Europe, the US and Asia for the last 20 years. Silicon Valley, still the preeminent example, was created by welcoming entrepreneurs from afar; Elon Musk of Paypal and Tesla is South African, Sergey Brin of Google was born in Russia, Jan Koum of Whatsapp was from the Ukraine.  Venture Capital for the best technology businesses flows on a global basis, including to all corners of Europe.

The UK has always had an important leading role to play in European VC investment; not just by investing on its own local leaders, but also by providing the capital, company building skills and even regulatory leadership across Europe that fuels the building of the global companies of the future. As we at Drap­er Esprit and Earlybird together search all over the UK and Europe, our team meets with thousands of entrepreneurs, all of whom rely on the flow of talent and capital, and all of whom want to build big, global businesses. As technology investors, we are naturally against any barriers to the flow of ideas, talented people and great technology led products and services. We hope our politicians find a way to ensure the UK remains at the centre of this growing and important industry.  

Back in 2016, we set out to build a leading venture capital firm starting with our £120m IPO on the London Stock Exchange and Euronext, democratising venture capital and allowing anyone to share in the growth of the best technology companies across Europe. Less than 3 years later, we have grown our firm substantially, built our shareholder base with some of the largest funds in the world, delivered strong share price performance and now have 4 “unicorns” in our portfolio; Graphcore, Revolut, Transferwise and UiPath, with hopefully more to come. We are determined that these, and those following fast in their footsteps, will no longer have to be sold off too early, as has been the case in the UK and Europe historically. We are proud to be playing our role, together with our partners at Earlybird.

This post was originally posted on Simon Cook's Linkedin profile here.