Cherry Ventures III closes on €175m

When asked about the current fundraising climate, Filip Dames, founding partner at Cherry Ventures, said: "We've seen a lot more interest this time around given our successful exits and some successful IPOs. Furthermore, the asset class has proven itself in Europe."

Cherry Ventures II, the fund's predecessor, will make no more portfolio investments, though capital remains for follow-on investments. Dames told Unquote there are no immediate plans to exit any companies from the fund, which closed on €150m in 2016. So far, Cherry Ventures I has realised seven investments.

Alongside the fundraise, Alex Langholz-Baikousis has been made CFO and operating partner, Thomas Lueke has been promoted to partner and Charlotte Bruce has been appointed principal.

Legal advice for the formation of Cherry Ventures III came from SNP Schlawien. No placement agent was involved.

Investors
Dames told Unquote that the fund received investments from a mixture of different types of LPs such as fund-of-funds, pension funds and universities. LPs in the firm's third fund mainly consist of existing investors, including LGT, ProSiebenSat.1, European Investment Fund and family office Haniel.

Dames said: "We still have a few individual investors. We like to involve them because of their network, and founders love it too, because we can connect these investors to our portfolio, but this does not make up a majority of the capital."

Approximately half of the investors in the firm's third vehicle are European and the other half are US-based.

Investments
The VC makes seed investments, normally in a company's first round of institutional fundraising. "Largely we'll continue with the same strategy for this fund, but we have seen valuations going up slightly due to the higher quality of companies and more experienced funding teams," said Dames, "To get to comparable ownership levels as with the last fund we will have to invest a bit more, which is why we have increased the fund size a little bit."

The firm typically participates in funding rounds that generate less than €10m for companies, and writes about 10 equity cheques a year.

Dames told Unquote that professionals at his firm generally have an expertise in one of six or seven verticals. Some examples Dames gave included next-generation retail, fintech, insurance, "deep-tech", AI and software-as-a-service companies. Mobility has also been a focus, with investments such as Flixbus, Drover and Auto1.

Although Cherry Ventures is a pan-European investor, Dames told Unquote he is enthusiastic about Germany as an innovation hub. "There's a lot of engineering talent working for larger companies such as BMW and Daimler, but we've seen that change over the last couple of years so that lots of experienced talent goes into entrepreneurship." He cites an influx of talent from the UK and the US as contributing to the venture ecosystem in Berlin. "Availability of venture capital funding has also changed so that it has never been easier to attract institutional financing than it is today".

People
Cherry Ventures – Filip Dames, Daniel Glasner, Christian Meermann (partners).

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