Women in VC: Revaia's Albizzati on founding a female-led firm and navigating valuations in 2023

Revaia is gearing up to complete a final close for Revaia Growth II by year-end, she said. Although the fund was initially expected to hold a final close by the end of 2022, as reported by Unquote, Albizzati said that the fundraising timeline has been extended "due to the financing conditions that have dried up considerably since the summer of 2022 due to the economic context: rising interest rates, inflation, falling equity and bond markets".

In this context, many funds extended their fundraising schedule with institutional investors freezing their allocations in the second half of the year, she noted. However, "we are very confident that we can fit into their 2023 calendar", she added.

Launched in early 2022, the vehicle follows Revaia Growth I, established in 2019 and whose EUR 250m volume was entirely deployed by early 2022, she said.

Revaia Growth II will ideally welcome institutional investors as LPs, including pension funds and insurers, which would contribute up to 80% of the fund's target size, as well as family offices, she added.

This new fund will invest larger tickets than its predecessor, which deployed EUR 10m-EUR 30m on average, she said, declining to give further details.

It aims to support 15 to 20 companies with the potential to build leadership in their market and develop a tech product which improves the workplace or consumers' day-to-day lives, she said. The vehicle specifically targets companies enabling SMEs digitalisation, workplace improvement, digital infrastructure and digital energy transition, she said.

Revaia Growth II targets companies with several million euros in annual recurring revenues (ARR) from EUR 20m Series B rounds to the pre-IPO stage, she added. It usually acts as the lead investors having the flexibility to be lead, co-lead or co-investors, depending on the situation, she said.

Both co-founders, Albizzati and partner Elina Berrebi, plan to make three to five investments per year through the fund until 2027, she added.

Sustainable growth
Albizzati and Berrebi established Revaia (then known as Gaia Capital Partners) in 2018, because they thought that the European growth market was not factored in enough by local funds when it came to funding rounds above EUR 50m, she said. It is a "missed opportunity" for European entrepreneurs and investors, she added. Revaia was created with the willingness to intertwine sustainable investment with a financial-focused approach, she said.

Revaia Fund II will invest across Europe, mainly in France, Germany, where the firm established an office two years ago, and in the UK, with a new location to open this year, Albizzati said. It could also invest in the Nordics, the Netherlands, Switzerland, Southern Europe and more opportunistically in Israel and the US, she added.

Revaia usually has a seat at the board of the companies they invest in, with this being the case in 75% of the portfolio, Albizzati said. It supports companies for around five years before exiting for a multiple of at least 3x, she added.

This second fund, which has a target of about 25% net IRR, has already invested in three companies, Dutch-Czech property-management software developer Mews, French crypto-currency market data provider Kaiko and California-based log analytics software firm Coralogix.

The fund offers quarterly ESG reporting to its LPs, Albizzati said. Two employees are dedicated full-time to ESG issues, she added. One third of Revaia's portfolio companies used to estimate their carbon footprint before the fund's entry against three thirds today, she said.

"As a value-added investor with strong convictions, we aim to work on boards' diversity and support management in their ESG practices," she added. Revaia established key performance indicators (KPIs) for diversity on the companies' board, C-level management and for the rest of their employees, she said. It is especially critical in tech, a sector which is lacking in terms of feminisation, she noted.

H1 2023 might still be difficult for tech companies as the trend towards valuations dropping will not stop; however the fund is betting on M&A and strong financial positions to make its portfolio resilient, she said. Around a third of the fund's portfolio companies have grown through bolt-ons in 2022 she said, naming US-based web-search software-as-a service (SaaS) developer Algolia and French ESG data intelligence platform for the real estate sector Deepki. "We are spending time with our companies to make sure that they have at least a year of cash runway and enough resources to grow with serenity," she added.

Breaking the glass ceiling
Revaia is self-described as the largest European growth fund founded by women, which is a "source of pride" for Albizzati, as the fund inspired many women to kick off ambitious projects, she said.

Revaia is still small for the growth market and has a glass ceiling to break, she said. There is still a long way to go as the venture capital sector lacks women general partners, although parity is synonymous with lasting growth, she said.

Both Albizzati and co-founder Elina Berrebi support French female networking club Sista, French state-supported association Diversidays, as well as European initiatives including the Women Forum and Women in VC, Albizzati said.

Following a conscious effort in screening profiles during the hiring process, today the fund's 17 employees are in equal numbers women and men and come from six different countries, she said.

Trained as an engineer at the Polytechnical school, Albizzati started her career at French state investment firm Bpifrance before joining French private equity fund LBO France where she used to screen both the French and Italian markets. She spent three years in New York for the Belgian PE fund Verlinvest where she invested in the American growth market before she came back to France and co-founded Revaia in 2018, she added.

Women looking to start working in the industry need to find fulfilment in their day-to-day work because it will make them strong and brilliant, Albizzati said. She does not think she had more hurdles to overcome as a woman when it comes to her career but noted that being an investor is a demanding job which requires humbleness, ambition and a strong personal investment.

[Editor's note: The eighth paragraph was amended to note that Revaia usually acts as the lead investor in its funding rounds.]

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