Speedinvest raises EUR 500m for fourth flagship vehicle; closes climate fund on EUR 80m

Speedinvest 4, which already has 90% in commitments, will invest EUR 300m in pre-seed and seed European tech startups, while the remaining capital will be reserved for follow-on co-investments in existing portfolio companies, according to a press release.

These follow-on investments will either be intermittent rounds before Series A or pure Series A participation, CEO and managing partner Oliver Holle told Unquote. Beyond that level, Speedinvest will make co-investments with its recently closed EUR 80m Climate & Industry Opportunity fund. The vehicle is investing EUR 3m-EUR 5m per deal, generally participating in Series B rounds. It targets new climate-tech startups addressing sustainability challenges in the industrial sector, while also supporting Speedinvest’s existing sustainability-oriented portfolio.

Having invested in about 140 startups, the build-up of Fund 3’s portfolio is now finished and the firm will make new investments from its new fund, he said. Fund 3 held a final close in February 2020 on its hard-cap of EUR 190m and roughly less than half of the capital of this previous flagship fund is reserved for follow-on financing rounds.

With a standard 10-year lifespan and a three-year investment period, the fourth fund is targeting 15% ownership in new investments, said Holle. In total it is seeking to make 100 deals which accounts for 15 to 20 startups per vertical, he said.

“In light of the current market environment we’re moving more towards pre-seed stages, with more than 50% of our deals being pre-seed deals these days,” he added. Speedinvest’s ticket sizes for pre-seed rounds range from EUR 500,000 in the lower end to EUR 2.5m on the higher end.

This is the first time that the firm steps away from its sector-focused fund setup, said Holle. Speedinvest 4 will make new investments across its six dedicated vertical teams, namely deep tech, fintech, health, marketplaces and consumer, industrial tech and Software as a Service (SaaS).

The change in structure made the fund more attractive to big institutional investors and simplified issues related to the ownership of investments. “With this fund generation we unlocked a level where we could attract big institutional investors, who tend to prefer less complex structures that require fewer questions around governance,” he said. “Our previous setup was very well suited to build up the expertise of the teams running our vertical-focused areas but it was definitely not the simplest to communicate.”

Moreover, Speedinvest’s past practice where the main fund coinvested alongside its sector-focused funds translated into lower ownership percentages per vehicle. “With all the six themes now under one roof, we have ownership under one fund,” added Holle.

The Climate & Industry Opportunity fund, which held a first close on EUR 45m in November 2021, will invest in new climate tech startups addressing sustainability challenges in the industrial sector, while also supporting Speedinvest’s existing sustainability-oriented portfolio, according to the press release.

Investors
With previous funds delivering more than 5x gross returns, all institutional investors from Speedinvest 3 returned, according to the press release. Major commitments include New Enterprise Associates (NEA), the European Investment Fund (EIF) and Bpifrance, alongside government funds, banks, insurance companies, pension funds and large family offices.

Many of Speedinvest’s most successful founders have also committed funds, including Austria-based cryptocurrencies trading platform operator Bitpanda, Berlin-based fintech startup Billie, Germany-based climate-tech-company Planetly, Germany-based battery management software startup TWAICE and Yokoy, a Swiss firm that makes use of AI for helping take care of travel expenses. In total, this new capital will bring Speedinvest’s assets under management (AUM) to more than EUR 1bn, according to the press release.

Speedinvest LPs have also committed EUR 200m to further support its most successful portfolio companies as they continue to scale, co-investing alongside growth funds, it said.

With more than 40 investors across Europe and offices in Berlin, London, Munich, Paris and Vienna, Speedinvest has built the largest seed stage investment team in Europe, it said.

However, the firm stopped fundraising during the first two quarters of 2022 as it came across a holdback from industrial LPs to respond to its fundraising efforts, Unquote reported in September.

“Although we initially thought we were very well prepared when we started fundraising for this fund, about a year ago, the fundraising environment significantly worsened after February, when the war broke out in Ukraine,” he said. “The combination of our existing, loyal LP base and the addition of the new investors, mainly from Europe, helped us reach our target quite comfortably.”

Moreover, given Europe’s challenging macro-environment, the fund’s LP base is now seeing only a handful of investors from the US and Asia, whose expected commitments did not materialise, he added.

Investments
Despite Fund 4’s bigger size, Speedinvest remains committed in early-stage startups and has already started investing since June this year, he said. Initial investments from the fund include Autone (SaaS, Italy), Drop (fintech, France / US), Solvo.ai (deep tech, UK), The Lowdown (digital health, UK) and NeoCarbon (industrial tech, Germany).

Climate continues to be the main theme in its pipeline, “often linked to green tech or hard science projects,” said Holle. For example, in October it invested in Cylib, a greentech startup on the lithioum-ion battery recycling, as well as in NeoCarbon, a Swiss CO2 conversion startup.

The firm’s other verticals also involve climate interests. Earlier this year it invested in Liefergrün, a sustainable delivery service provider.

Traditionally fintech and marketplaces are Speedinvest’s two biggest verticals with the biggest deal flow, followed by SaaS, deep tech, health tech and industrial tech, said Holle.

Moreover, the firm seeks to invest at least 30% of its capital in female-founded startups over the next three years, said Holle, as well as a 10% allocation in emerging markets, primarily in the MENA region and selectively in Southeast Asia and Latin America. Fintech and marketplaces are the main investment themes in these markets, he added.

Holle expects Speedinvest’s team to focus on the solid financing of portfolio companies next year. The firm, which operates an in-house team, Platform+ to support portfolio companies and offers access to its own corporate partner network, is prepared for a tough capital raising year, he said.

“It’s been hard for the last couple of years, but I don’t think we’ve seen the bottom yet,” he added. “A lot of companies will have to be much more capital efficient compared to the past and this is what LPs are looking at.”

The Climate & Industry Opportunity fund was close to 30% deployed in September. Its investments include deployments in five existing portfolio startups – Packhelp, TIER Mobility, TWAICE, CoachHub and Schüttflix – as well as one initial investment in Toucan, a Web3 carbon market infrastructure provider, as reported.

The vehicle mainly backs companies in its existing portfolio that are focused on digitalisation and decarbonisation and will target returns of 20% IRR, as reported. It will use around 80%-90% of its capital to make co-investments in funding rounds alongside Speedinvest's existing funds. It invests EUR 3m-EUR 5m per deal, backing 12-14 companies and generally participating in Series B rounds.

Speedinvest’s portfolio includes six unicorns, namely Bitpanda, GoStudent, Open, TIER Mobility, Wayflyer and wefox and more than 20 ‘future unicorns’, as defined by Dealroom, including Adverity, Billie, CoachHub, Schüttflix, TWAICE and Primer, according to the press release.

People
Speedinvest − Oliver Holle (CEO and managing partner).

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