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Partech’s 4th Seed fund: €120M to back entrepreneurial talent from day 1
Dec. 5, 2022
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Partech’s first Seed fund was launched in 2013, and was part of the first generation of Seed funds in Europe. From the start, it has been an independent fund, managed by a dedicated team of former entrepreneurs, from Europe and the US.
Our 4th Seed fund has closed oversubscribed at €120M. We are delighted that 100 Entrepreneurs – of which 35 were themselves funded by Partech in the past – trust us to "pay it forward" to the next generation of Founders, investing their personal money in our fund, alongside leading financial institutions and family offices from around the world.
New fund, same ambitions
With this new fund, our goal is to work with around 50 founding teams, at pre-seed and seed stage. We invest, as a lead or co-investor, initial checks from €300K to €3M, and typically reinvest until Series B. We favor quality over quantity, in order to remain very selective and have enough bandwidth to extensively support our portfolio.
We back entrepreneurial talent, in Europe and around the globe, who are chasing "the next big things" of this decade, without limiting us to specific industries, markets or models. We are convinced that spotting the future leaders of new emerging categories often requires a broad scope, and a genuine open-mindedness towards what the most talented Founders come up with. With our past funds, we have backed companies as diverse as Alan, the new health insurance & superapp (before Insurtech was hot), Sorare, the NFT fantasy sport gaming platform (before « NFTs » were a thing) or Neoplants, the plant fighting air pollution (without any even distant comparable worldwide).
As our world, economy and tech industry are undoubtedly experiencing very challenging times, we are convinced that there couldn’t be a better time to invest at Seed stage. Indeed, the pools of tech talent, repeat Founders & scaleup executives have exploded, but only the boldest and most obsessed individuals actually start a company in such uncertain times. Moreover, there is no shortage of major issues to tackle, notably around climate change, economic inclusion, health and mental wellbeing, privacy-first technologies, etc, for this new generation of Founders willing to have a big impact on the world!
The expertise & focus of an independent Seed fund, with the reach & resources of a large-scale VC platform
Spotting, backing and working with exceptional Founders from the very beginning of their journey is the shared passion – and only focus – of our Seed team. It is indeed in our experience, a unique craft, requiring stage-specific expertise, commitment and mindset.
But we are fortunate to operate our Seed strategy as part of the larger Partech platform, as it allows us to offer our portfolio Founders – and their teams – unmatched resources, reach and perspective.
Partech is a large-scale platform with a multi-stage and global footprint. A pioneer in Venture Capital, born in 1982 in San Francisco and Paris, Partech today has over $2.5B under management and a team of 70+ people spanning 20 nationalities. It brings together a community of over 400 Founders across Europe, America, Africa and South-East Asia, 4 investment teams (Seed, Venture, Growth & Africa), and in-house experts for Finance, Legal, Business Development, Marketing & HR.
It also means that our Seed team has much more bandwidth and fire power to work with our portfolio companies than most independent Seed firms, without having the typical conflict of interest of most larger VC firms, often investing at Seed mainly as an option to lead future funding rounds.
Founders and portfolio companies as our best ambassadors
We are privileged to have had the chance to back and work from the beginning of their journey with iconic companies such as Alan, CoachHub, Jellysmack, Merama, Sorare, or Xendit.
Within our Seed portfolio of 150+ companies, spread across 28 countries and 4 continents, many more category defining companies are in the making, like Beam, Maze, Nowports, Ornikar, Pennylane, Shipper, TestGorilla, TheGuarantors, Zenyum or Zolar.
We are also very proud of several of our “alumni” companies who have joined forces with global market leaders in recent years – bringing significant financial performance and liquidity to our funds in the process – including the likes of Aiden (acq. by Twitter), Bloomon (acq. by Bloom & Wild), Cardiologs (acq. by Philips), Dejbox (acq. by Carrefour), Frontier Car Group (acq. by OLX), Glofox (acq. by ABC Fitness), Pricematch (acq. by Booking), Sketchfab (acq. by Epic Games), Ubble (acq. by Checkout), Volterra (acq. by F5 Networks).
We know that the best Founders are obsessed with customer satisfaction, and believe that we should have the same discipline. The anonymous satisfaction survey we run yearly is quantitative evidence of the rave reviews we receive from our community of Founders, with an NPS of 93, a rating of our “value-add” of 4.7/5, and 93% ranking us among their best investors:
Results of our annual Partech Portfolio Satisfaction Survey (from 58 anonymous respondents in our Seed portfolio)
We’re also truly delighted and touched by the fact that the Founders of 80% of our portfolio companies with a sizable exit (full or partial) have invested their personal money into our new fund!
A few testimonials from the Founders of some of our most iconic portfolio companies:
"Partech has been a truly exceptional partner for us since the very beginning. They have indeed been extremely active, always taking the time to support and advise us, understand the business in-depth and challenge us, deep dive with us in countless topics, make their hands dirty when needed, and always work for the company's long-term interest! Much more than an investor, they are a perfect board member, but most importantly a trusted, daily strategic advisor. We are super thankful and thrilled to still have them at our sides!"
– Michael Philippe, Co-CEO of Jellysmack
"Partech was the very first VC to trust us and share our long-term vision, even before we had a product. They have been very supportive from day 1, from our initial board meetings in our kitchen and no revenue, throughout our multiple rounds of funding, the recruitment of 400 people and more than €250M in revenue. They are a partner for the long run, sharing our vision, always seizing opportunities to make a difference for us, notably in terms of business opportunities and talent. We like working with Partech and are now gladly sharing with them great seed opportunities from our network!”
– Jean-Charles Samuelian-Werve, CEO of Alan
"We've been truly blessed to have Partech on board with us since almost day 1! They have always taken the time to dig into our business & ask important questions, and really helped us hands-on to be ready for a Series A and then B in just a few months! I'm also very thankful for how supportive, engaged & responsive they are, always genuinely caring for the long-term interest of the company and advising & supporting us to make the best decisions. Thank you!"
– Nicolas Julia, CEO of Sorare
A collaborative & flexible model, to work with the best Founders and investors around the globe
While we strive to be a partner of choice for Founders, and will always build our own, independent conviction on each opportunity (without needing nor requiring to have other investors interested), we also fully recognize that co-investing with other valuable investors is often critical to maximize the chances of success of a company at Seed stage.
To this end, right from our inception, we designed a truly collaborative & flexible model: our fund strategy and investment approach are aligned with Founders, to help them maximize the value of their investor base and get the most extensive and complete support. We believe early stage VCs shouldn’t impose self-serving and aggressive syndication constraints upon Founders, typically with arbitrary & rigid ownership targets, or insisting on only “leading” funding rounds.
This is also strongly increasing our dealflow, win rate and ability to syndicate with the best funds worldwide, as we maximize collaboration with other investors (Seed funds, business angels, and Series A & later-stage investors).
This new fund was oversubscribed and we could have raised significantly more. However, we have been very careful to limit our fund size in order to remain true to this collaborative & flexible approach, and ensure that we don’t fall prey to the plight faced by larger funds who are typically required to become more aggressive (and/or less selective) to deploy their capital.
Building an enduring and performing Seed franchise
In our experience, creating value as a Seed fund – i.e. finding hidden gems early and supporting them – comes down to 4 pillars:
#1 – Getting in touch with Founders as early as possible in their journey, thanks to a strong discipline, network, reputation, organization and sourcing tools.
When the company may not even be incorporated, the idea is still a “work in progress”, or the founding team is not yet complete, it can be very challenging for an investor to get it on its radar (while, conversely, it is of course, a major challenge for most Founders to raise money so early). Your next investment might come from an in-house automated sourcing tool, or simply through a referral from your Founders community. We strongly believe that we need to constantly evolve and adapt to stay in the game, in a fast-paced ecosystem.
#2 – Forming strong and independent conviction about companies with no stable foundations, nor reliable data to assess the opportunity.
During the Seed phase, the company’s foundations are being (re)shaped, and major unknowns, imperfections & singularities make it essentially non-obvious to comprehend and believe in. Investors also don’t have the luxury to assess meaningful achievements, nor to see how the company has evolved over a few years, and typically struggle to find relevant expertise or data to assess new markets and models. It’s also important to forge one’s conclusions independently from other investors. Two Founders with only a 2-pager may be onto the next big thing. “Too early”, “Nobody has ever done it before” or “This deal is not hot among other VCs” are never good reasons for us to turn down an opportunity.
#3 – Offering financial backing to match the needs of Founders at the most formative stage of their company.
This should truly be “table stakes”, but is still not the case across the market. We believe that the key tenets of Seed stage investing include: being bold believers with strong ambitions, and not being afraid of risks, uncertainty, chaos, or iterations/pivots; offering relevant ticket sizes and healthy investment terms; maximizing the value of the captable by welcoming syndication with the right co-investors, and having aligned incentives to find the best follow-on investors; following an appropriate reinvestment policy, even when the path to Series A is longer than expected; having a quick, transparent & suitable (re)investment process and fund governance; and being committed & dedicating time to support Founders. Our philosophy, investment strategy, team DNA, organization & processes are designed to reflect these tenets.
#4 – Supporting Founders on the existential challenges they will face to bring their idea to life and prepare for the journey ahead.
Many of the most successful companies we've backed needed multiple iterations to find their product-market fit, hustled hard to hire the right talent, fought to get their next fundraisings across the line, needed time to crack a scalable and profitable model... before becoming fast-growth companies that would attract some of the best investors worldwide (e.g. Sequoia, Benchmark, Accel or Index), or even becoming a global leader. We have been humbly but diligently working with them across this foundational journey, and keep on improving our approach, expertise and skills to truly make a difference to the Founders we back.
After 10 years of refining our philosophy, thesis and model across 4 generations of Seed funds, learning from our first successes and from our many mistakes, we believe that we have forged our own way of doing Seed, that will keep delivering value to our community of Founders and to our investors. Thank you to all of them for their trust and support for another decade!