Nordic VC Inventure today announces its fourth fund, worth €150 million, to support early-stage startups in the Baltic and Nordic countries. This fund will also see the VC dip its toes into even earlier stages by writing angel investor-sized notes.
What is the purpose of the fund?
Inventure aims to be the first institutional investor a startup brings, whether that company is in the B2B SaaS, healthcare, fintech, deeptech, marketplaces or consumer sectors.
One-third of the fund will be allocated to investments in new startups, with the rest earmarked for follow-on investments in top-performing startups, according to investment partner Ekaterina Gianelli.
“What we know best is how to create value in the business, from pre-seed or all the way to Series B,” says Gianelli.
With ticket sizes ranging from €200,000 to €5 million, this fund also allows the former to make investments even sooner – tickets the size of an angel investor.
Angel investing without angels
Inventure’s shift to trying to access even earlier deal flow isn’t entirely unique. Many late-stage VCs have launched angel programs to get better visibility on early-stage companies and to make sure they don’t lose some of the best young startups. Atomico, Sequoia, Blossom Capital, and Backed VC have all launched their own scout or angel programs.
Seed and pre-seed venture capitalists haven’t really seen the need for this, as they already have good information about early ventures. Many investors in these companies also invest with their own money, such as Sophia Bendz, partner at Cherry Ventures.
Unlike other scouting and angel programs in Europe, which give money to angel investors to invest on behalf of a company, Inventure’s “angel tickets” will be written by its own team of investment. The drafting process for these tickets will be less extensive than the usual due diligence involved in larger tickets. According to Gianelli, investment decisions are made within two days of the startup taking calls with three of the company’s investors.
“I think this angel program is basically the first step where we can invest when founders just have an idea or a PowerPoint or something like that,” says Gianelli, who leads the angel program for Inventure.
So far this year, the VC has performed five of these angel rounds with tickets ranging from €200,000 to €500,000. The plan is to do 18 in total over the next two years, investing primarily alongside other angel investors.
“It’s not a huge amount of money as such. But then, of course, from the founder’s perspective, it’s a very, very easy way to get extra money to add, for example, to angel investors,” Gianelli says.
“The main focus is on operators and possibly serial entrepreneurs [for angel tickets]. Some may be new founders, but then we have to believe that these people know what they are doing. And I think that’s the biggest bet.
Do not shy away from high-risk investments
Inventure is one of the most active VCs in the Nordics and has around 80 startups in its portfolio, including Finnish refurbished phone startup Swappie, Swedish pet insurance company Lassie and an exit from Finnish startup food delivery company Wolt, which was acquired by US company DoorDash last year.
With the tech market cooling, many founders worry that investors are turning their backs on high-risk investments to focus on less risky startups. This is not something Inventure plans to do.
“In terms of risk profile, we haven’t changed. We invest early on, so it’s often a bet on the founders and by supporting the best, we hope they know what they’re doing,” says Gianelli.
The LPs
While young VCs may find it harder to raise capital for new funds as the market evolves, closing its fourth fund wasn’t a big challenge for Inventure, according to Gianelli.
With some slight delays with the latest signings, the fund is now full with backers made up of 90% institutional investors such as the European Investment Fund, UK-based Molten Ventures and local Nordic players such as insurance company Ilmarinen, state-owned private equity firm Tesi, and financial institutions like OP and Nordea. The other 10% of LPs are family offices and individuals.
Mimi Billing is Sifted’s Nordic correspondent. She also covers health tech and tweets from @MimiBilling
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