Venture capital firm Draper Esprit has raised a further £160 million to invest in European startups , shrugging off concerns that Brexit has made it harder for UK VCs to raise significant amounts of capital.
The dual-listed investment firm announced on Friday that it has raised £100 million on the London and Dublin stock exchanges. That complements an additional £60 million that it has raised through 2017 via other sources including the Enterprise Investment Scheme (EIS), the Venture Capital Trust (VCT), and secondary co-investment funds.
The fresh capital will be invested into startups across Europe (particularly Western Europe) through the course of 2017, Draper Esprit said.
Notably, all of the new capital was raised without the help of the £2 billion European Investment Fund (EIF), which has recently stopped supporting UK VC firms as a result of Brexit.
Simon Cook, CEO at Draper Esprit, said in a statement: “Much has been written about the uncertain future that British VC fundraising faces in the wake of Brexit. At Draper Esprit we believe our industry can find new investors and that the UK can continue to play a significant role in leading the wider European VC market.
“As a permanent capital listed company, dual-listed in the UK and Ireland, we can access public markets by offering a partnership model with investors who wouldn’t otherwise have access to, or the capacity to actively manage, these type of investments; as well as reinvesting our realisations from exits into the next generation of tech businesses each year without the need to raise a new fixed life private fund every 5 years.”
Founded in 2006, Draper Esprit has backed European startups including Graze, Trustpilot, Clue, Graphcore, Pushdoctor, and Perkbox.
Draper Esprit plans to use its funds to invest in startups at all stages, especially those focusing on enterprise software, digital hardware, consumer services, and digital health.
The VC firm has backed over 120 companies and invests in approximately one startup a month, Cook told Business Insider in an interview earlier this year, adding that the average Draper Esprit investment is around $US10 million (£7.7 million).
“Those headline grabbing multibillion dollar landmark deals, we’ve done less of,” Cook admitted. “We’re typically investing when there is 50 to 100 people and the valuation is $US50 million to $US100 million and then we’re selling it for $US200 million, $US300 million, $US400 million. It’s less headline grabbing stuff but a lot more cash has gone back to our investors.”
In its lifetime, Draper Esprit has invested over $US500 million (£388 million), and it invests at the series A stage approximately 50% of the time, Cook said. Big wins include chip designer Movidius, chip manufacturer Cambridge Silicon Radio, and movie rental service LoveFilm.
Draper Esprit is part of a wider network of venture capital companies operated by the Draper network, that has £2 billion under management.
Here is Cook’s full statement on the new £160 million funds on Investegate:
“Much has been written about the uncertain future that British VC fundraising faces in the wake of Brexit. At Draper Esprit we believe our industry can find new investors and that the UK can continue to play a significant role in leading the wider European VC market.
As a permanent capital listed company, dual-listed in the UK and Ireland, we can access public markets by offering a partnership model with investors who wouldn’t otherwise have access to, or the capacity to actively manage, these type of investments; as well as reinvesting our realisations from exits into the next generation of tech businesses each year without the need to raise a new fixed life private fund every 5 years.
As a wider group we have also raised significant co-investment funds through our EIS, VCT and secondary funds, with £60m raised in 2017 to date. We are seeing increasing innovation and entrepreneurship in Europe, especially in enterprise software, digital hardware, consumer services and digital health, and our funds will be used to continue investing in these areas from series A, B and beyond, with 70 per cent. of our capital reserved for scaling-up and increasing our stakes in existing portfolio companies through later rounds.
We have now raised in excess of £160 million of new capital to deploy during 2017 following the £153 million raised during 2016 from our IPO, EIS and VCT funds and the cash realisations available for reinvestment within the Company’s portfolio. If we continue to grow our co-investment funds and make further realisations for reinvestment, at this rate we would over the five years of a typical LP fund, have the equivalent of £800 million(approximately US$1 billion) to deploy, making us a strong partner in Europe and filling a much needed gap in the market post Brexit.
We invest in forward-thinking and innovative businesses and firmly believe that the best entrepreneurs in Europe are capable of building world leading technology companies when provided with patient, long term growth capital, access to global networks and support from an experienced investment team.
Furthermore, we believe that all investors large and small should have access to the venture capital asset class. By democratising the venture capital model and making our expertise accessible to a wider, broader market we are breaking new ground in the VC market and this Placing and Subscription is a superb validation of that model. We are grateful for the support that existing shareholders such as Woodford Investment Management, Baillie Gifford and the Ireland Strategic Investment Fund have shown and are delighted to welcome new investors such as Invesco Perpetual and Hargreave Hale as major new shareholders.”
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