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Raising a seed fund in VC's toughest times

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Preqin First Close
Your essential newsletter for the global alternatives industry
February 12, 2024
In this newsletter
  The big picture: backing todays start-ups to become tomorrows stars
  In detail: private wealth challenge; capital concentration; Amundi acquisition
  Top stories from Preqin News and Preqin Pro
Contact the team at [email protected]
Follow us on LinkedIn and X (formerly Twitter) @Preqin
The big picture

Who’d raise a first-time venture fund right now? These are the hardest times for even the most experienced managers to attract new money. 
 
Globally, only 174 VC funds closed in Q4 2023, totaling $21.8bn, making it one of the weakest quarters in a decade.*  
 
But it’s not all doom and gloom. In the past few weeks in Silicon Valley, Venrock closed a $650mn fund and Innovation Endeavours raised $630mn. In Europe, London- and Tallinn-based Plural Platform closed a €400mn fund, while Vienna-based Speedinvest raised €350mn. In Singapore, Asia Partners closed a $474mn vehicle. 
 
Then there are pioneers, those just starting out, financing the start-ups today that are the potential later-stage deals, M&A targets, and IPO candidates of tomorrow.  
 
Take Tom Horsey for example, a digital entrepreneur who’s launched Eoniq, a Seville-based seed fund. As a business angel, he previously set up an accelerator, StartupLabs Spain, and ran an investment vehicle supported by the European Angels Fund
 
Tom’s raised €14mn so far for Eoniq and has already backed 35 digital ventures. He aims to raise up to €45mn, including from Axis (part of the Spanish government’s Instituto de Crédito Oficial). 

‘It’s a very bad time to raise capital,’ he admits. ‘But it’s really quite a good time to invest it, so there is a silver lining.’ He’s now seeing higher-quality start-ups that are further up the growth curve and have market traction, but are still at reasonable valuations. 
 
About 60% of his deal flow comes from regional Spain, which has not been as well served by early-stage investors as Madrid or Barcelona. (Preqin data shows the run-rate for the whole country has been between only 10 and 20 new VC funds per year over the past decade.)  
 
Paloma Cañete, Investment Director of Madrid-based Fides Capital, has invested in Eoniq. The family office does direct deals with private companies but also wants to diversify its portfolio by geography and stage.

‘We try to find managers like Tom, who have got the skills, who have got the resources to find the best deals, and who are adding value to start-ups.’

Shaun Beaney, Editor, Preqin First Close
*Insights+ subscribers can find out more in our Venture Capital Q4 2023: Preqin Quarterly Update
In detail
From Preqin News
Challenging investment climate to expose private market winners and losers. Churchill Asset Management forecasts wider divergence as industry adjusts to slower economic growth, higher interest rates, financial volatility, and geopolitical shocks. But the US-based fund manager also predicts a ‘Goldilocks era of growth and opportunity in private capital’.
From Preqin Pro
The Teacher Retirement System of Texas has committed $125mn to CVC Capital Partners Asia Pacific VI for buyouts in consumer and services sectors. It’s also committed $50mn to Trinity Hunt Partners VII for buyouts in the US. The pension scheme currently allocates 18% of its total investment portfolio to private equity, below its 24% target. 
Preqin connects you with
Explore our global data coverage map
On the horizon
Alternatives Symposium Melbourne
February 21–22, Melbourne, The Inside Network
Complimentary ticket code: PREQINFREE
Women in Alternatives 2024
March 13, Webinar, Preqin
ALTSLA 2024
March 18–20, Los Angeles, Markets Group
Navigating Fundraising in 2024: Keys to Succeed
March 20, Webinar, Preqin
Private Markets Investor Europe
March 21, London, Clear Path Analysis
Preqin First Close is brought to you by our expert researchers, analysts, editors, and writers. We warmly welcome your comments, ideas, and suggestions at [email protected].
Shaun Beaney
Editor, Preqin First Close
[email protected]
Grant Murgatroyd
Head of News
[email protected]
Nicole Lee
Head of Content
[email protected]
For media enquiries, please contact
[email protected]
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Your essential newsletter for the global alternatives market Preqin First Close Your essential newsletter for the global alternatives industry February 12, 2024 In this newsletter ●   The big picture: backing today’s start-ups to become tomorrow’s stars ●   In detail: private wealth challenge; capital concentration; Amundi acquisition ●   Top stories from Preqin News and Preqin Pro Contact the team at [email protected] Follow us on LinkedIn and X (formerly Twitter) @Preqin The big picture Who’d raise a first-time venture fund right now? These are the hardest times for even the most experienced managers to attract new money.  Globally, only 174 VC funds closed in Q4 2023, totaling $21.8bn, making it one of the weakest quarters in a decade.*   But it’s not all doom and gloom. In the past few weeks in Silicon Valley, Venrock closed a $650mn fund and Innovation Endeavours raised $630mn. In Europe, London- and Tallinn-based Plural Platform closed a €400mn fund, while Vienna-based Speedinvest raised €350mn. In Singapore, Asia Partners closed a $474mn vehicle.  Then there are pioneers, those just starting out, financing the start-ups today that are the potential later-stage deals, M&A targets, and IPO candidates of tomorrow.   Take Tom Horsey for example, a digital entrepreneur who’s launched Eoniq, a Seville-based seed fund. As a business angel, he previously set up an accelerator, StartupLabs Spain, and ran an investment vehicle supported by the European Angels Fund.  Tom’s raised €14mn so far for Eoniq and has already backed 35 digital ventures. He aims to raise up to €45mn, including from Axis (part of the Spanish government’s Instituto de Crédito Oficial).  ‘It’s a very bad time to raise capital,’ he admits. ‘But it’s really quite a good time to invest it, so there is a silver lining.’ He’s now seeing higher-quality start-ups that are further up the growth curve and have market traction, but are still at reasonable valuations.  About 60% of his deal flow comes from regional Spain, which has not been as well served by early-stage investors as Madrid or Barcelona. (Preqin data shows the run-rate for the whole country has been between only 10 and 20 new VC funds per year over the past decade.)   Paloma Cañete, Investment Director of Madrid-based Fides Capital, has invested in Eoniq. The family office does direct deals with private companies but also wants to diversify its portfolio by geography and stage. ‘We try to find managers like Tom, who have got the skills, who have got the resources to find the best deals, and who are adding value to start-ups.’ — Shaun Beaney, Editor, Preqin First Close *Insights+ subscribers can find out more in our Venture Capital Q4 2023: Preqin Quarterly Update.  In detail Research, news, and analysis Private wealth in 2024: how GPs can tackle the fundraising challenge   Brookfield raises $10bn for second Global Transition Fund  Preqin Global Reports 2024 Webinar Series  For Preqin Insights+ subscribers  Research Note: The concentration of private capital   Trending Data: The slow train in infrastructure deal-making  Preqin Quarterly Updates Q4 2023  What's hot around the world  Amundi acquires Alpha Associates ESG in US: demonstrating value is key in complex regulatory landscape  How will India’s private capital market fare in 2024?  From Preqin News Challenging investment climate to expose private market winners and losers. Churchill Asset Management forecasts wider divergence as industry adjusts to slower economic growth, higher interest rates, financial volatility, and geopolitical shocks. But the US-based fund manager also predicts a ‘Goldilocks era of growth and opportunity in private capital’. From Preqin Pro The Teacher Retirement System of Texas has committed $125mn to CVC Capital Partners Asia Pacific VI for buyouts in consumer and services sectors. It’s also committed $50mn to Trinity Hunt Partners VII for buyouts in the US. The pension scheme currently allocates 18% of its total investment portfolio to private equity, below its 24% target.  Preqin connects you with 59,511 Fund managers 30,081 Investors 362,000+ Service providers Explore our global data coverage map ➔ On the horizon Alternatives Symposium Melbourne ➔ February 21–22, Melbourne, The Inside Network Complimentary ticket code: PREQINFREE Women in Alternatives 2024 ➔ March 13, Webinar, Preqin ALTSLA 2024 ➔ March 18–20, Los Angeles, Markets Group Navigating Fundraising in 2024: Keys to Succeed ➔ March 20, Webinar, Preqin Private Markets Investor Europe ➔ March 21, London, Clear Path Analysis Preqin First Close is brought to you by our expert researchers, analysts, editors, and writers. We warmly welcome your comments, ideas, and suggestions at [email protected]. Shaun Beaney Editor, Preqin First Close [email protected] Grant Murgatroyd Head of News [email protected] Nicole Lee Head of Content [email protected] For media enquiries, please contact [email protected] Update your email preferences . Verde, 10 Bressenden Pl, London SW1E 5DH Contact +44 20 3207 0200 preqin.com More Links Preqin Pro My Account Privacy Preqin™ All Rights Reserved.
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