VC Profile: Vektor Partners backs tech mobility transformation with new fund

After securing about EUR 50m in commitments on its first close, the fund is targeting a size of about EUR 125m-EUR 150m with a hard-cap at EUR 175m.

The fund’s LP base currently comprises a sovereign wealth fund active in the Middle East and Africa, a UK-based VC fund and an international family office, alongside a couple of high-net-worth individuals and an industry executive, Bihari said. The firm expects to have a typical mix of LPs by the time it holds its final close, being more geared towards an institutional investor base.

The minimum LPs commitment is EUR 1m, although the majority of LPs have contributed more than this, according to Bihari.

The fund follows the industry standard when it comes to lifespan, management fees and carry structure, with a ten-year deployment period, he said. The VC did not use a placement agent to raise the fund.

Founded in 2020, with the investment advisory team based in London, Vektor Partners immediately started investing while it was building up the structure of the Luxembourg-domiciled fund, Bihari said.

“After soft discussions while we were actively investing, we were encouraged to move ahead after the summer last year in an accelerated way, narrowed down our anchor investor group and completed the first closing within about six months,” Bihari told Unquote. "We are confident that we will raise the balance of the fund by year end.”

The VC’s four-member team is comprised of Bihari and fellow partners Isabel Falkenberg, Valentin Menedetter and Chris Riley. Bihari previously led the automotive technology investment banking group at BNP Paribas. Co-founder Riley has experience as a CFO at startups including Berlin-based algebra education platform, TigerMilk.Education and provider of visual intelligence software for mobility, Peregrine.ai. Falkenberg has significant experience in ESG and serves on the advisory board of the International Automobile Federation, while Menedetter previously held senior positions with Palantir Technologies and Speedinvest.

The team plans to continue the build-out of its team both in Europe and the US and already has specific candidates in the pipeline, Bihari told Unquote.

Closing the funding gap

The firm aims to be an independent source of capital for startups without ties to the mobility industry, where corporate ventures are more frequent. It will invest in deep-tech startups employing AI and software to facilitate software-as-a-service (SaaS) and mobility-as-a-service (MaaS)-based businesses that are poised to transform mobility.

Bihari told Unquote that mobility is comparable in size to financial services sector but it is relatively underfunded. “In the financial services sector, for instance, which is comparable in size, there are a large number of Fintech funds, whereas in mobility there is probably less than a handful of dedicated managers on a cross-regional basis,” he said. “So we focus a lot on software, AI and data-enabled businesses, essentially on scalable deep tech that's required to really fundamentally change how people and goods are moved from A to B. In most cases these are B2B businesses, and our specialist knowledge really helps. We think it’s more challenging for us, and VC in general, though to invest in very capital intensive projects, such as, battery plants, new vehicle manufacturers or charging infrastructure.”

The fund combines sector, investment and exit expertise with a tailored geographic strategy to back businesses across Europe, and the US, with Israel also playing an important role. “These three geographies in particular are key in the very international mobility technology market, so we believe you cannot afford to be regional,” said Bihari. “There’s a lot of new technology that comes out of Israel and the US, for instance, while Europe remains a core mobility market, where a major share of the auto industry’s R&D has been based in the last decades.”

The team’s main goal was to strike a good balance between industry and technology, Bihari said. The VC has made sector-focused advisory board appointments including US-based AI expert Roger Spitz, and Germany-based Bernd Gottschalk, the former president of the German Automotive Industry Association (VDA).

Building the pipeline

The fund aims to have about 15 investments in its portfolio and will invest at a pace of about five to ten deals per year, Bihari said.

It will operate as a Series A fund, but will look at seed opportunities as well as Series B rounds, which will typically be follow-on rounds, with initial investments of around EUR 3m-EUR 5m. The fund could deploy up to EUR 10m for follow-on rounds, with the opportunity for additional co-investments from its LPs.

“With 45% of our fund reserved for follow-on investments and with our institutional investor partners we can complete quite sizable follow-on rounds to support the businesses for quite a long time,” said Bihari.

Vektor partners has funded five investments, one of which has already been realised, via the partners’ own funds and contributions from select co-investors, some of whom are also LPs in the new fund.

The firm delivered its first US capital markets exit with AEye in August 2021, when the LiDAR tech startup from California went public. The firm first invested in the company via a Series B funding round in 2020 alongside Kleiner Perkins, Intel Capital, Taiwania and Hella Ventures.

Together with Nielsen Ventures, Vektor Partners led a USD 17.5m Series A funding round for NoTraffic, a platform that employs computer vision, machine learning, and cloud integration, in 2021.

Other recent investments include German start-up Peregrine Technologies, in which Vektor led the seed financing round; and Israeli technology firm GuardKnox, where it led the firm’s recent Series B. Peregrine uses edge computing and machine learning to process data while providing telematics suppliers, fleet owners, insurers and developers of autonomous systems with contextual insights. GuardKnox is focused on software and communication technology solutions to help car makers transform their vehicles electronic architecture. The firm’s latest investment in 2022 was a Series A round for a manufacturer of virtual sensors and software-based health and usage monitoring, including wear and failure prediction, Compredict alongside Blackberry and THI. Its newest investment is yet to be officially announced but will be made public next week, Bihari said.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Send to  

• Topics
• Venture
• UK / Ireland
• Technology
• GPs
• United Kingdom
• In Profile