La Famiglia announces second fund

Judith Dada, partner at La Famiglia, told Unquote: "We had a first close in the fall of 2019 and hit the target in early 2020, but we continue to keep the fund open. We closed the investment period for the first fund in August 2019 and started investing from the second fund in the fall, so it was a smooth progression."

The firm's predecessor fund closed in 2017 on €35m.

Asked about the fundraise, Jeannette zu Fürstenberg, founding partner at La Famiglia, told Unquote: "It's been an interesting process – it was easier raising our second fund as we had the majority of our existing investors re-upping, which created a strong endorsement, and we have seen a strong network momentum created from that existing investor base."

The firm is currently a team of six and will be adding a new colleague in September 2020.

Schnittker Möllmann Partners provided legal advice on the fundraise.

Investors
La Famiglia's LP base comprises entrepreneurs, family offices and corporates, but the firm hopes to open up to institutional investors in Fund III.

Zu Fürstenberg explained the rationale behind the firm's investor base: "When we started out, we were seeing a transformational wave in European industry, with people turning towards B2B opportunities and industrial technology. We saw that many B2B companies suffered from a lack of visibility on customers and getting feedback on the product they were building, and their go to market strategy. There was an opportunity for us to bridge that information asymmetry through a platform between startups lacking access to potential customers and industry looking to partner with such companies. Based on my family business background, too, this became obvious, and we thought that capital would be the best way to align interests and to allow access by committing to a fund, as well as benefiting from the strategic leverage to their own companies."

Investments
The fund plans to make 30-35 investments and will write equity tickets of €500,000-1.5m for its portfolio companies.

While the coronavirus has affected the way in which La Famiglia is able to communicate with potential startups, Dada said the firm has been able to adjust: "We have made eight investments. It's always a challenge when you don't get to meet founders in person, but, given that we have been quite a remote team for some time, we have strong processes around video calling, internal tools etc. In comparison to other firms solely focused on one office, we found it less challenging to adapt to the new normal. We make sure to ask more personal questions, and we take time to ask about strengths, experiences and their background."

The fund's investments so far include robotics software developer Arculus, as well as employee service requests developer Back Technologies. The firm has also previously invested in HR software developer Personio and data collaboration platform Graphy.

Asked about the firm's investment pipeline, Dada said: "We are definitely looking at another four or five investments in 2020 – we typically do 8-10 per year. The investment pace might end up being slower this year with Covid-19, since we spent some time assessing the stability of our portfolio. But a lot of our portfolio companies are seeing quite intense tailwinds, especially in robotics, industrial transformation and future of work.

"Something that we are definitely focusing on more is the space around robotics and tech that people once might have considered to be more outlandish. But companies need to refocus the way they create products and value, which has for example led us to a robotics investment in the field of automated kitchens. There was hesitancy about this in Europe, but since many restaurants and kitchens had to close during lockdown, businesses are seeing that automation can play a role in offering the same quality output but for lower costs."

Zu Fürstenberg added: "I am very much focused on the future of industrials, such as supply chain efficiency and logistics; it has become obvious that this is a key lever in reaching cost cutting goals, so that they can come out of the crisis in a lean and efficient way."

People
La Famiglia – Jeannette zu Fürstenberg (founding partner); Judith Dada (partner).

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