Alven Capital raises $261 million fund to put money into French entrepreneurs
French VC agency Alven Capital has been round since 2000 and has change into a significant participant within the VC scene in Paris. The agency not too long ago closed a model new $261 million fund referred to as Alven V (€250 million), which is an enormous step up as Alven IV was solely a $125 million fund (€120 million).
Through the years, the agency has managed to put money into many profitable startups led by French entrepreneurs. Alven Capital plans to do the identical factor as soon as once more, however with extra money within the checking account.
“This €250 million fund — we’re not going to start out making very huge Collection B investments, we’re going to apply it to Collection A rounds,” associate Jérémy Uzan advised me. “We normally shared our greatest investments with different traders. Now, we’re in a position to make investments as a lot as €30 million on a single firm.”
The agency plans to speculate its fund throughout 20 to 25 corporations, which is in keeping with Alven Capital’s earlier fund. However the agency received’t must co-lead an funding with an enormous British or American VC agency if it thinks that it’s going to a be a profitable one.
In comparison with many French VC companies, Alven Capital will get its funds from conventional restricted companions that normally put money into personal fairness companies. Alven Capital doesn’t work with huge public French corporations or strategic traders. In the event you put money into the VC agency, it implies that you’re searching for an excellent return on funding and nothing else.
All backers in Alven IV reinvested in Alven V — they symbolize round two-thirds of Alven V. New LPs additionally invested, in addition to a couple of entrepreneurs from Alven portfolio corporations — they symbolize a tiny portion of the fund. The agency doesn’t wish to share the names of these entrepreneurs. “We don’t contemplate it as a advertising argument,” Uzan stated.
Alven Capital raised its latest fund three years after Alven IV. Provided that they needed to flip down some LPs, the VC agency plans to lift new funds on the identical tempo sooner or later.
In the case of the funding technique, Alven Capital has all the time targeted on early-stage investments in tech corporations led by French founders. This time, the typical funding might be a seed or Collection A spherical starting from €200,000 to €7 million, with the flexibility to speculate €30 million in whole in a single firm over a number of rounds.
Once you exclude VC companies that put money into Collection B and later, Alven Capital says that it’s now the biggest French VC agency specializing in Collection A and French entrepreneurs.
Why is Alven Capital speaking about French entrepreneurs as an alternative of French corporations? Based on Uzan, many French entrepreneurs can begin an organization in a single nation and find yourself in one other — it doesn’t actually matter to them. “At the moment, we understand that many French entrepreneurs contemplate borders as an afterthought,” he stated.
Much more attention-grabbing, whereas most VC companies don’t discuss returns on funding, Alven Capital shared two tidbits concerning the agency’s efficiency. First, over the previous 16 years, Alven Capital has had a gross inside charge of return above 30 % each single yr.
Second, whereas a lot of the investments in Alven IV are nonetheless energetic, among the portfolio corporations have already been acquired only a few years after Alven Capital’s preliminary funding. 7 out of the 25 corporations have led to important acquisitions with a median of 5x with regards to returns on funding. Throughout all funds, Alven Capital has invested in 50 corporations and 30 of them have discovered an exit.
There are presently six individuals on the funding group — Guillaume Aubin, Charles Letourneur, Jérémy Uzan, Raffi Kamber, Rodolphe Menegaux and François Meteyer. The identical group will handle the investments with Alven V.
We’ve coated a few of these acquisitions over time. Zendesk acquired BIME Analytics for $45 million, Trainline purchased Captain Prepare for $189 million, Fb snatched Wit.ai, and so on. Alven Capital can also be an investor in Algolia, Dataiku, PeopleDoc, Stripe, Drivy, and so on. Even when a few of these names don’t ring a bell, I can inform you no doubt that Alven Capital has a formidable observe document.
I’ve additionally requested about startup valuations getting dearer in France. “Inflation will not be so unhealthy so long as inflation is throughout the board.” Now, let’s see if Alven Capital can discover even greater exits for its portfolio corporations.