THCap II targets €10m-plus first close for January 2016

José Rojo
17 November 2015

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Spain- and US-headquartered VC house Telegraph Hill Capital (THCap) has announced plans to hold a first close in excess of €10m for its seed- and series-A-focused second fund in January 2016.

Speaking to unquote", THCap managing general partner Luis Gutiérrez Roy explained fundraising for THCap II kicked off when LPs were first approached in April 2015.

The VC is looking to raise a minimum of €10m for the fund's planned first close in January 2016, which could be followed by a final close during the summer, Gutiérrez Roy added. The target has been set at €30-35m.

The vehicle is THCap's first European fund. It has a standard 10-year structure and follows industry standards with regards to management fees, hurdle and carry. Its $10m, fully-invested predecessor targeted predominantly the North American market, where 18 of its 22 portfolio companies are headquartered.

Investors
The LP base of THCap II includes several backers of the firm's first vehicle. The group includes institutional investors such as funds-of-funds, as well as family offices and high-net-worth individuals.

According to Gutiérrez Roy, THCap plans to source €20m of commitments from private investors, while the rest should come from state-backed financiers such as European Investment Fund and British Business Bank.

Investments
THCap II will look to back 20-35 companies across its lifespan. The fund will write €100,000-400,000 cheques when backing seed rounds, with the possibility of €1.5m tickets when taking part in a series-A.

Unlike its predecessor, which only considered series-A rounds for previously backed assets, the vehicle might enter companies directly at the later stage. Put together, funds dedicated to each individual company will not exceed the €2.5m mark.

With its new fund, the VC is aiming for stakes in the 5-15% region; the fund's increased size with regards to its predecessor means a higher potential to secure holdings in the upper end of that bracket than THCap I.

THCap II targets technology companies, with a focus on telecommunications, software, cybersecurity, fintech, health and edtech. The fund will split its portfolio almost equally between Europe and North America – a maximum of 20% of all commitments will be dedicated to Spanish businesses.

People
THCap II will be managed by the VC's three general partners: Luis Gutiérrez Roy, Stephen Brown and Anselm Adams. They are respectively based at the firm's offices in Barcelona, Silicon Valley and London.