Midas List investor Reshma Sohoni’s Seedcamp has backed some of Europe’s best startups. Now, it’s back with a new fund to support a new batch of AI, robotics and deeptech founders.
Seedcamp
When Reshma Sohoni founded London-based Seedcamp in 2007, the pitch was simple: support Europe’s best founders. For almost two decades, the fund wrote some of the first checks to companies such as automation startup UiPath, Danish fintech Pleo and most notably digital bank Revolut.
These investments helped turn the $23 million Seedcamp raised for its third fund in 2014 into over $446 million. The UK fund’s net internal rate of return of 50.3% puts it in an exclusive category rivaled only by the best branded US funds. These investments and others have made Sohoni and Seedcamp’s managing partner Carlos Espinal in Midas Seed List and Midas List Europe games.
Now Seedcamp is announcing a new round of funding that’s almost 100 times larger than its first round of $2.7 million. It has raised $220 million for a new seed fund and a $100 million growth fund to support companies breaking out of its portfolios.
“Our vision is that great European and British talent can go global and win. That’s why we’re here 2 decades later and we’re all aligned to support that talent,” says Sohoni. “Founders really want an investor who has that global view, can give advice and put them in the rooms that matter.”
Sohoni moved to Miami in 2021 but continues to run the fund, while most of the Seedcamp team continues to invest out of London. In 2022, Seedcamp brought in an investor in New York to back and support its portfolio companies expanding in the US
Seedcamp has an unusual strategy compared to other seed funds, which often make only a few investments in startups. Sohoni and her team have invested in as many as 125 startups from one fund and now typically write around 100 checks per fund. “We’re not indexing the startup market, we’re indexing the early-stage founders,” he says.
Venture capital funds in the United States rarely disclose their investment performance. It is even rarer in Europe. The most important metric for a venture fund is how many dollars it returns for every dollar invested, known as Distributed to Paid-up Capital (DPI). Seedcamp shared that the third, and best performing, fund has already paid out 13.32 times its initial investment. European VCs tracked by the data platform TrackVC show that funds raised in the same year have paid back an average of 1.88 times for every dollar invested.
Revolut has been a key driver of this success. Seedcamp invested about $400,000 in the startup which is now in talks for one was mentioned offering valued at more than $100 billion. The fund earned a return of over 1000 times on investment, according to sources close to the fund. Seedcamp has since sold part of its stake in Revolut to return capital to investors, according to The Financial Times.
Seedcamp’s later, larger funds have yet to replicate this stellar performance, but still outperform peers. Its fourth capital raised in 2017 has paid back 0.62 times to investors. It includes some big AI bets, such as video platform Synthesia, which was valued 4 billion dollars in January and data center operator Fluidstackwhich was reported in April to be in talks to raise its valuation to $18 billion. Seedcamp values the seed shares that are still growing in this fund at 3.9 times the value of each dollar invested (Total Value to Paid-In Capital). TrackVC data shows that European funds over the same period had paid 0.45 times on average, while the startup data firm Carta shows that the US-based sample of funds it tracks returned 0.31X in DPI.
The Seedcamp partner believes that European governments and companies should do more to support startups by signing deals and awarding contracts to new players instead of just buying from established names. “We’re in a new paradigm. Europe and the UK have this huge GDP and they have to bring it in as customers,” he says.
