Kindred Capital heads for first close of third fund

The size of the Kindred III fund will be equal to the two previous ones of around EUR 100m each, Palma noted.

The fund’s LP base has a 90% LP base overlap with the VC’s previous funds, with investors being primarily family offices, entrepreneurs, and institutional investors, Palma noted.

The fund invests in EUR 1m-EUR 2m in initial tickets per round and usually takes stakes of 10% and above. It has a holding period of between 10 and 13 years. The VC’s current two funds are 2016-vintage and 2019-vintage with a geographic focus on the EU plus Israel.

Kindred Capital currently has 54 companies in its portfolio, with around 26 companies per fund. Its most recent investment was Eleven Therapeutics, an Israeli biotechnology company providing AI solutions for nucleic acid therapeutics. The company raised USD 22m in seed funding earlier this month.

The VC’s other recent investments include BotsAndUs, a UK-based manufacturer of autonomous service robots, which raised USD 13m in a seed funding round led by Lakestar earlier this summer.

Paddle, a London-based provider of revenue delivery platforms for B2B software-as-a-service companies, raised USD 200m in Series D funding in May 2022. It was the second funding round for Paddle, in which Kindred Capital participated; it also backed its USD 68m Series C round in 2020 as part of a group of investors.

High-conviction strategy
Kindred Capital pursues a high-conviction strategy, with a focus on a particular team rather than a specific sector, Palma said. Its investment policy is primarily driven by clicking with the founders and the growth rates of the market the company operates in, as “team matters more than industry”, according to Palma.

It is highly selective in terms of teams it chooses to back, picking them based on the maximum potential score (MPS) survey it sends out to founders, Palma said.

Kindred Capital is a generalist fund without a particular sector preference, she said, adding that it tends to back B2B companies more frequently than B2C, although it invests in the latter too.

In addition, the fund follows an equitable venture strategy as it shares carry with the companies it backs. Based on this strategy, every entrepreneur the fund invests in becomes an LP in the fund.

After all commitments have been returned to fund investors, Kindred Capital shares at least 20% of the fund’s profits with the companies it invests in.

Apart from supporting the founders by sharing carried interest, the firm also pays for founders’ coaching, and management training, and connects founders with peers.

The firm hires its investment staff based on equal partnership, meaning that they are all partners — it has five partners in total, with nine staff overall, Palma said.

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