Frst aims to hit EUR 100m hard cap by year-end for AI-focused third fund

Formerly known as Otium Ventures, Frst used to be backed by founder of Smartbox, Pierre-Edouard Stérin, from 2015 to 2019. It became independent four years ago, but still manages the portfolio it constructed during the period, usually referred to as Frst 1, Entremont said.

Frst 2 collected EUR 90m in commitments, with a final close in 2020, he said. The vehicle has invested in 30 companies and still has a few million euros in dry powder to reinvest in its companies if needed, he added.

The vehicle invested in French cybersecurity expert Bastion when the business secured EUR 2.5m, as well as in EUR 3.6m funding round French API-security business Escape, carried out this month, Entremont said.

Earlier this month, Entremont evoked the fight that France is leading to become a giant in AI, identifying the brain drain as one of the biggest hurdles the country has to overcome, as reported.

Frst has more than EUR 200m under management or advised, accordig to an official press release.

Investors
The vehicle’s limited partners (LPs) include historic partners such as French state-owned venture investment firm Bpifrance, as well as VC fund Axa Venture Partners and the European Investment Fund, he said.

Newcomers were entrepreneurs from companies the VC firm has already invested in, including employees from Payfin, Owkin, Electra and Pigment, he added.

Investments
The vehicle will invest in France and in seed capital only, he said. It will deploy EUR 1m-2m on average, right around when the companies are founded, he said. Frst aims to act as a sparring partner to entrepreneurs and spends a lot of time getting to know them before investing in their company, he said.

Frst 3 will deploy across thirty companies and aims to carry out seven to ten deals annually over a three-to-four-year period, the partner said.

The firm does not operate on specific sectors but rather bases its investment decisions on tech founders, although the new fund will focus on AI, he said. The vehicle has already invested in four undisclosed companies, three of which are AI-based, he added.

“As tech investors, we consider that AI reached an inflection point in the sector and has become omnipresent as a topic. It will be present in the vast majority of our investments,” Entremont said.

Frst always invests as a minority investor. Although its entry point usually comes at a point when no board has officially been formed, the firm advises founders and stays in the business until it secures Series A and B financing, by which time Frst has a less active role by then, Entremont noted.

The VC firm is usually the only institutional investor when it enters a company, although historically it has mostly co-invested with France-based Kima Ventures, co-founded by business angel and tech entrepreneur Xavier Niel.

Frst plans to exit companies after six to ten years in portfolio, he said.

He declined to specify what multiple Frst 3 would seek when exiting, but said that its LPs usually aim for 4-5x and that the firm keeps these numbers in mind.

People
Frst - Pierre Entremont (co-founder, partner).

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