Project A holds USD 375m final close for Fund IV

The new vehicle brings the firm's total AUM to more than USD 1bn, according to a statement.

The fundraise for Project A Fund IV was launched in summer 2021, partner Christoph Rösler told Unquote. The firm held a final close for Project A Ventures III in September 2019 on EUR 180m.

The new fundraise also marks a development of the VC's co-investment strategy, with up to USD 80m earmarked for these investments via Fund IV and a co-investment vehicle. The firm announced Rösler's promotion to partner in April 2022, following which the GP expected to make two to four buyout or growth investment deals per year, as reported.

The VC offers operational support and sector expertise as part from these deals.

In addition to the development of its co-investment strategy, the firm has been working on its ESG structures. "On the ESG side, we are also considering SFDR and we are looking to hire a head of ESG," Rösler said. "We have also added climate technology as an opportunity in this fund, for both the venture side and for PE co-investments."

Investors
The majority of LPs re-upped for Fund IV, Rösler said. The LP base comprises institutional investors, European corporates and family offices, as well as individuals and founders. The fund's individual investors are mostly from the German ecosystem, with a large portion of the institutionals from North America and the remainder from Europe, Rösler said.

LPs in the fund include TopTier and Hamilton Lane, as well as family offices including the Otto Group, Henkel and Oetker.

Investments
The VC will continue its focus on B2B and B2B fintech, commerce, enterprise software, data infrastructure, supply chain companies, according to the statement.

Fund IV fund will invest in 30 companies at pre-seed and Series A, deploying tickets of USD 100,000-10m. "We invest all over Europe, including the UK and the Nordics," Rösler said. We are a registered business and have an office in the UK, which makes talent acquisition and deal flow generation much easier."

The VC is adapting to the current economic environment, taking into account both the challenges and opportunities that it presents. "In our existing portfolio, we are making sure they hold onto their cash for longer and we are managing our reserves to make sure that we back our strongest companies," Rösler said.

"We are taking a more defensive approach. But with rounds getting bigger and entry valuations coming down, it is a good time to deploy for new VC investments."

The firm generally takes a long-term view on its investments, Rösler told Unquote. "The most negative impact of the current environment is currently being seen in exits," he said. "But we don't have to exit anything in our portfolio now, when the timing is not right. And we could even extend the lifetime of our funds if needed."

On the co-investment side, the fund expects to make eight to 10 deals and has made one to date from the vehicle. The fund expects to have two more co-investment deals in the coming weeks, Rösler said.

"We are seeing a lot of interest for co-investment and are getting demand from new partners," Rösler said. "The operational topics that we cover are growing in importance – even PE portfolio companies operating in traditional industries need to digitize their business, and it's easier to develop this with a partner like us. We have not seen a slowdown in dealflow yet and our partners are not in ‘shock mode'."

People
Project A – Christoph Rösler (partner).

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