VR Ventures announces €40m first close for debut fund

The firm did not use a placement agent. P+P Pöllath + Partners provided legal advice.

The fund plans to hold a final close by the end of 2020 targeting €100m, VR Ventures managing director Timo Fleig told Unquote.

The VR Ventures team is also made up of Berliner Volksbank Ventures managing director Andreas Laule, as well as Samuli Sirén, managing director at Redstone Digital. Innovation manager Marco Bruns and investment manager Mickael Bellaiche are also part of the team.

Fleig said that at Berliner Volksbank Ventures, investments had previously been made via a corporate venture vehicle in which Berliner Volksbank was the sole investor. Fleig explained the advantages of establishing an independent fund: "The first advantage from our perspective is that we now have more weight, with more investors who can commit and put together more capital. In fintech and proptech [real estate technology], we are seeing ever-larger rounds taking place, where you need to have more capital behind you, and there are higher valuations. So, we wanted a larger fund. We also thought that the fund would be an interesting entry point for professional investors in the finance area."

Investors
Berliner Volksbank, Bank 1 Saar, Rheingauer Volksbank, VerbundVolksbank OWL, Volksbank Bielefeld-Gütersloh, Volksbank Kassel Göttingen, Volksbank Rhein-Ruhr, VR Bank Südpfalz and VR-Bank Würzburg have all backed the fund. Ideal Lebensversicherung has also committed to the vehicle.

Fleig told Unquote that the investor base brings advantages for the fund's potential portfolio companies when it comes to industry connections: "We have more banks on board as investors and we can now add more value for the fintechs in our portfolio, we can make the link between startups and our investors. We did this a lot with BV already, but it is of course easier when you have 10 investors."

Fleig added that the backing of independent industry investors is key in the financial and real estate technology sectors: "A lot of fintechs require independence from an investor, and it can be difficult when a corporate fund gets involved. But now the fund is independent, our companies know that we are, too, and we can represent their interests. We had a good reputation for independence with BV, but now it is really there in black and white."

Beyond the first close, the fund is also open to other institutional investors, Fleig told Unquote, adding that the firm is keen to build an LP base of investors with an interest in the sector who can provide input to the vehicle's portfolio companies.

Investments
The fund will target real estate and financial technology companies, including businesses offering tax advisory and accounting tools. It will participate from the late-seed stage onwards, investing in companies that already generate revenues and have a product, Fleig told Unquote.

The fund will invest in 20-30 companies, with a maximum of 10% of the fund permitted to be invested per company. The vehicle will also allow co-investment opportunities for LPs, Fleig said.

Fleig told Unquote that the fund currently has two deals in the pipeline.

People
VR Ventures – Timo Fleig (managing director).

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