Sova VC makes first investment from debut fund

The fund held a first close in September 2020, with around two thirds of its €50m target committed. It has a hard-cap of €65m.

The fund is structured as a Luxembroug SCSp with management fees, carry and a hurdle rate in accordance with market standards.

Investors
The fund has one anchor investors with less than 10 LPs currently committed to the fund. Alexander Chikunov, partner at Sova VC, told Unquote the firm’s investors have been based in Europe to date, but the firm does consider investors based in the US.

The fund has one institutional investor and the remainder can be considered as professional investors under the definitions set about by the AIFMD, according to Sova.

Investments
The fund is expected to invest in seed-stage and series-A rounds mainly, extending to series-B in some cases. Chikunov expects to build a portfolio of more than 20 early-stage technology companies, writing equity cheques in the range of €500,000-1.5m, growing to as much as €4m.

Chikunov said: “I wouldn’t have expected our pipeline to be so strong at the beginning of our investment period. We could place our first capital call in a matter of days after our launch.”

Although sector agnostic, the Sova VC team has a focus on urban technology, financial technology and healthcare, and its initial geographic focus will include partnering with growth-stage companies in the UK, the Nordics, the Baltic states and the east coast of the US. Chikunov told Unquote many opportunities have already arisen in these geographies. “We have one deal we’re looking at in the UK in subscription services, and we’re building our view on this company at the moment.”

Smartcat, the fund’s first investment, is a B2B translation services marketplace that connects translation agencies, freelancers, and enterprise clients to enable continuous delivery of multilingual content. The firm invested $2.5m in the company, which is based in Boston.

People
Sova VC - Alexander Chikunov (partner).

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