Graybella Capital pushes back first close for new fund to Q3

Eliza Punshi
15 May 2020

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US-based venture capital firm Graybella Capital has pushed back the first close of its new fund to Q3 of 2020, having previously expected to hold it in the first half of the year.

The firm launched in 2019, spending a year, according to managing partner Ruta Laukien, "getting to know the ecosystem" and meeting companies.

This year, it started fundraising for Graybella Capital I with a hard-cap target of €150m, and was on the road until traveling restrictions were implemented due to the Covid-19 pandemic.

However, Laukien says maintaining existing relationships has not been difficult during the lockdown. If anything, a lot of people have had more time and are therefore more available for meetings than before, she said.

The LP-base is made up of investors in the US, Europe, the Middle East and China, according to Laukien.

The fund is registered in Luxembourg and plans to invest €100m in companies in southern Europe and the UK, and €50m in the Baltic and Nordic markets.

The vehicle will target series-A and -B investments in innovative B2B companies operating in fields of life sciences and complex technologies.

Laukien previously told Unquote that the VC foresees deploying equity tickets of €5-10m in Spain, Portugal and the UK, while its Baltic tickets are expected to stand at around €3m per company.

The firm told Unquote that it will not wait until its first close to begin investing in companies. Instead, it will use a special purpose vehicle to invest in companies, which will then be merged with the fund when it holds a first close.

The VC is now at the commercial due diligence stage and has narrowed down to three companies – two of which are healthcare companies in the UK and Spain, and the third is a tech company. It expects to finalise one of the deals by next month.

The VC said it had been in talks with the companies prior to the Covid-19 emergency and that meeting new companies now would be difficult.

"We would never pull the trigger without ever meeting them", said Laukien.

At the same time, the VC does not want to wait too long. Laukien said: "Valuations for companies might come down, and for some they certainly have. But for really good companies, they won't come down."

The VC has faced difficulties launching a new fund in the current environment. Laukien said: "People are being a lot more cautious. LPs are saying they're interested, but nobody wants to write a cheque."

However, Laukien said the beauty of them being a new fund is that they do not have a portfolio to manage. "Other firms must be quite busy with their portfolio companies right now." The firm is instead using this time to lay groundwork.