Project A Ventures raises largest fund to date of $375m

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Estonian VC Superangel announces new €50m fund

Berlin-based VC firm Project A Ventures has raised a new $375m fund to continue backing early-stage European tech companies. It’s the fourth fund from Project A — coming more than two and a half years after its third — and brings the firm’s assets under management to $1bn.

Where will Project A Ventures’ money be spent?

  • Project A Ventures will aim to make between eight and 12 investments each year at a ticket size of €1m to 10m. It is looking to add around 30 portfolio companies (and has already invested in five so far from the new fund.) 
  • Even though the majority of deals will be B2B focused, Project A will continue its investments in consumer businesses. 
  • Specific areas of focus include fintech, commerce, enterprise software, data infrastructure, supply chain and climate tech. 
  • Project A says it can reserve “significant follow-on capital” for single investments and actively participates in companies’ future financings. For instance it participated in the Series C fundraise of portfolio company Trade Republic, an online broking app.
  • The fund also plans to coinvest up to $80m in private equity deals. Over the last few years, Project A has built a portfolio of 11 private equity coinvestments in companies that have been around for some time and operate successfully in several European markets. Coinvestments include Luqom, a leading online specialist for lighting and smart home innovations, Helloprint, a marketplace for customisable print products, yoummday, a customer service platform and AmannGirrbach, a digital dental technology provider.

What’s Project A’s track record?

  • Project A Ventures was founded 10 years ago, and has invested in 100 companies across 15 industries and 12 countries in Europe.
  • It has a number of unicorns in its portfolio including digital health platform Kry, digital freightforwarder Sennder, fintech WorldRemit and escooter company Voi.
  • Its “soonicorns” — companies approaching a $1bn valuation —  include Spryker, a Berlin-based startup providing ecommerce tools for businesses currently valued at $500m, and one of Sifted’s German startups to watch in 2022. 
  • This year, Project A has backed companies such as ExpressGroup, a fintech making tax returns simpler, pet insurance company Dalma and Knowunity, a learning platform for children.

Expanding the “operational VC” model

Many funds call themselves operational VCs, but Project A likes to think its model is a cut above the rest.

It has 140 in-house experts which are employed full time (in addition to 15 VC staff) to support portfolio companies across areas such as software engineering, product development, business intelligence, brand and communications, data, marketing, sales and recruiting.  

In the last year, Project A says its operational teams worked more than 100,000 support hours for portfolio companies. It also says it’s seeing “rising demand” for ops support from PE companies in its portfolio too.

That support doesn’t come free, however. If portfolio companies want to use those in-house experts, they need to pay for the support hours or the projects they’re involved in. 

While many comparable agencies price their services at cost plus 20% (or sometimes more), Project A says it makes a 10 to 20% loss (this is compensated by the management fee which covers the operational team’s costs). It’s a good deal for startups that can receive these services at a lower cost than the standard market rate.

Sifted’s take

  • Project A Ventures is one of the oldest VCs in Europe, and has earned itself a reputation for being a reliable partner for founders — especially since it claims to have the largest VC platform team in Europe. Now on its fourth fund, it’s clearly doing something right.
  • Project A by DNA is a German fund and is mostly known in the German-speaking region — though it opened an office in London in July last year. The question is, how will Project A develop a brand outside of Germany, and compete with the many VCs with boots on the ground in the UK, Europe’s largest tech market?

Miriam Partington is Sifted’s DACH correspondent. She also covers future of work, coauthors Sifted’s Startup Life newsletter and tweets from @mparts_

Go to Publisher: Venture Capital – Sifted
Author: Miriam Partington in Berlin