Raise heads for second close for debut impact VC fund

The Raise for Good vehicle, which has a target of EUR 80m, has raised EUR 45m until January 2022 and seeks to add another EUR 10m-EUR 15m by its second close. The fund is expected to hold a final close before the end of this year.

The Paris-headquartered sponsor launched the fund in January 2022 with a strategy to invest in early-stage ESG-focused businesses, they said.

"Implementing ESG criteria when a business has reached a certain maturity is difficult and expensive, whereas if those criteria are adopted early, it enables conscious scaling and drives value," Martin said.

Raise has an in-house methodology to monitor its portfolio impact and ESG-related growth and will also use the SaaS-based platform Reporting21 created by sustainability advisor Sirsa.

Raise Seed for Good plans to attract institutional investors such as state-owned investment fund Bpifrance. The vehicle already counts as investors some of Raise's existing LPs, as well as French family offices and entrepreneurs. Corporates including the VC fund Orange Ventures managed by telecommunications provider Orange, entertainment retailer Fnac Darty and prepaid lunch voucher specialist Edenred also invested in the fund according to a press release.

Raise Seed for Good would ideally generate returns of 5x money and 25% and 30% IRR, the executives said.

Raise Ventures, the VC arm of Raise Group, has two other funds, both launched in 2017: Raise Ventures, an evergreen vehicle; and Raise Media Investments, which invests EUR 5m or less in early-stage media companies on behalf of French TV station TF1.

Raise is no stranger to impact investing; in June 2019, it created Raise Impact, which held a EUR 240m second close in October 2021. The vehicle targets profitable companies with a positive environmental or societal impact and with annual revenues between EUR 5m-EUR 200m. It invests between EUR 10m and EUR 25m in European businesses.

Investment criteria
Raise Seed for Good will take minority stakes and a seat on the board of companies with less than EUR 500,000 in annual revenue and operating in the proptech, fintech, retail and software markets, Martin and Berion said. It targets European businesses, mainly in France but also in Spain and Italy, they added.

The fund will deploy around EUR 1m-EUR 2m in pre-seed or seed funding rounds, with total investment capped at EUR 8m per business, they said. It plans to complete a total of 25 to 30 investments. Raise Ventures' management team is "open" to co-invest, ideally with UK-based or French funds or business angels.

Raise Seed for Good has already invested in three businesses: educational video game publisher PowerZ, sustainable online bank Helios, and AI for waste management specialist Lixo. It plans to enter in two new companies before summer, both co-heads said.

Raise Ventures sources deals internally and has no legal advisor mandated for upcoming deals, they added. The management team has usually collaborated with legal firms Orrick, Jones Day and Clifford Chance, they noted.

Raise Seed for Good does not have any exits lined up for before 2025, Martin and Berion said, although they noted that this was not set in stone. Usually, Raise's venture funds conduct exits after between three to seven years of investment, they added.

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