Transatlantic venture capital firm Partech International now has about €160m across its two current active funds – and, for the first time, is going after seed deals.
The firm – which makes internet and ICT investments from San Francisco, Berlin and main office Paris – today announced a final top-up to bring its main Partech VI fund to €130m. It also announced a new €30m seed-stage fund, Partech Entrepreneur. It’s unclear when both deals actually closed.
It’s definitely not all new funding. Partech VI started life as a €100m fund in December 2011 and has made at least five deals since then: La Fourchette, Sigfox, and Teads in France, YD in the Netherlands from Berlin (a €4.6m deal) and Sensopia in the US.
Venture capital firms, like the startups they support, need to secure investment backing. About 20 institutional investors have contributed to Partech VI, including France’s Edenred and Groupe Casino. Partech Entrepreneur is backed by France’s National Seed Fund (FNA), BNP Paribas and Econocom, joined by about 40 entrepreneurs and “digital economy personalities” from France and Silicon Valley.
It’s often said that Europe – like the US – is suffering from a shortage of Series A funding. Why, then, would Partech branch out into seed deals, where there’s more funding available and more competition from other investment sources?
“There is a lot of early seed money in the market to raise an initial €100-250k to get going,” Gabriel Matuschka, the head of Partech’s Berlin office, said.
Partech’s plan is to enable larger seed rounds of between €500k and €1.5m, either as a lead investor or as a support investor. “That buys companies enough time to get to a point where they have enough traction to raise a €2.5m Series A much more easily,” he said. “We like to participate in both rounds and the seed fund lets us do this.”
A July 2013 report by DFJ Esprit and Go4Ventures estimated about 270 deals in Europe attracted about $1.8bn in venture capital in the first half of 2013 – only 96 of those deals were worth more than $5m. All up, the regions covered in the study experienced a “modest contraction” in overall deal value compared to the same period in 2012.
Image credit: Flickr user Alex Indigo
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