Stride.VC, the new VC fund from Fred Destin, formerly a partner at Accel, and Harry Stebbings, producer of the “The Twenty Minute VC” podcast and ex-Entrepreneur-in-Residence at Atomico, is being officially unveiled today, confirming most of the details of my earlier report.
The fund has closed at just over its Â£50 million target and will be used to do seed investments exclusively in U.K. startups (at least for now). The team has been bolstered, too, with Arj Soysa, ex-Atomico and most recently head of finance for LGT Impact, joining as operating partner. The firm also disclosed its first investment earlier this month, backing healthcare messaging app Forward Health.
In a call with Destin last week and followed up over subsequent emails with the pair, I got further details on Stride.VC’s LPs and how Destin and Stebbings plan to approach seed investing. Kicking off, I asked if perhaps there was already enough money in the U.K. (and elsewhere in Europe) chasing seed-stage startups.
“We donâ€™t think there is too much seed money at work in Europe,” says Destin. “We think tech startups are impacting more and more industries and sectors so the importance and impact of great founders is growing. Itâ€™s logical that the VC market grows alongside the startup ecosystem. Just look at the amazing diversity of projects coming out of London and the spread of industries people are going after.
“Stride is fundamentally trying to answer the question of ‘if all the stars are aligned, what could this look like’ and constantly strives for greatness. Founders often tell us that ‘real’ risk appetite is still missing in the venture capital community”.
The pair say they plan to write “meaningful seed checks,” typically in the region of Â£1.5 million, but will consider anything pre-Series A that enables founders to make the next jump convincingly. “We exclusively do seed and we get diluted with our founders over time,” they tell me.
“We are happy to write those larger checks when it matters most, when the data is ambiguous, the startups are still raw and constant change is the name of the game. “We embrace the chaos that can surround a business at that stage. We don’t make assumptions and ensure we can all question and challenge each other to maker the best decisions. Our intention is to weaponise both the expertise and the ignorance of everybody around the table”.
The point of differentiation — if I’ve read correctly — is that Stride.VC wants to do less but larger seed investments than perhaps some other small seed firms in Europe. This, the pair say, is partly what they mean by conviction investing and the absolute opposite end of the spray ‘n’ pray spectrum.
“We undertake fewer projects that many of our peers. This is a factor of both the size of cheque we write and the profile of founder we’re looking for. We are not claiming our strategy is better — itâ€™s just different. We undertake fewer projects with absolute conviction,’ they both write.
Currently, the firm is 100 percent focused on the U.K., but Destin and Stebbings say they will relax that rule once Stride.VC’s operations are well honed. With that said, there are no plans to become a pan-European venture capital firm as “proximity matters,” so any entry into another market will only be done after careful consideration.
In terms of investment thesis or specific sectors or technology the pair are looking to invest in, they say that entrepreneurs are “fundamentally better at finding white spaces than VCs are,” and so the aim is to be as “mentally plastic” as possible.
“Having said that, we only invest in what we understand well, so right now we are primarily focused on the upper echelons of the stack, which means exceptional product experiences that wow the user or customer. Our themes will evolve as we grow the team and continuously learn about new markets. We donâ€™t view machine learning or blockchain as standalone themes but rather as key long-term enablers of innovation”.
Meanwhile, a raft of new LPs are being disclosed. Mostly notably they include publicly-listed U.K. venture capital firm Draper Esprit, who I’m told was one of the first batch of investors to commit to the new fund as part of its fund-of-funds initiative.
In addition, the other LPs are Delin Capital, Compagnie Nationale a Portefeuille (Groupe Frere), Korelya Capital, Entree Capital, Merifin as well as the newly de-merged marketplaces division of Schibsted (codenamed MPI).
A number of notable founders and industry execs have also invested including Alex Chesterman of Zoopla, Henri Moissinac from Uber, Garrett Curran, Riccardo Zacconi and Stephane Kurgan of King.com, Ahmed Husain, and others.
Source: Techcrunch Disrupt