Startups may be in the middle of winter, but the ray of sunshine shining on some VCs speaks of a different trend. EQT Venturesthe venture fund arm of Swedish investment giant EQT that bets early on startups, mainly in Europe, has closed its latest fund and filled its coffers with €1 billion (and $1.1 billion in total pledges).
This brings the total that EQT has raised to €2.3 billion since the launch of EQT Ventures in 2016. To date, the company has supported approximately 100 companies, with 18 exits and nine “unicorns” (Wolt, Small Giant Games, Einride , Handshake, Netlify and Instabox/Instabee are in that group). This third fund was raised and closed relatively quickly, between February and June of this year (the last papers came in since), and some 13 investments have been made to date, including Juni, Nothing, Knoetic and Candela. them.
The larger EQT has emerged in recent months as one of the key deal makers as larger privately-owned companies have been seeking financing and/or exit opportunities. These include the recent purchase of New Jersey-based Billtrust for $1.7 billion and leading an investment round for Knoetic.
But it has also put money where its mouth is, so to speak. Earlier this year, sister subsidiary EQT Growth announced a $2.4 billion fund largely focused on scaling startups outside of Europe. Growth has supported Vinted, Epidemic Sound and Mambu, among others.
The plan is to use this latest EQT Venture fund for similar geographic purposes: the company plans to use it to make investments between $1 million and $50 million, with about two-thirds of all investment falling in Europe, with the rest in the US. whole world. UK and US, said Lars Jörnow, a partner with the company.
In terms of categories, EQT Ventures remains generalist, but ideally looks for startups that focus on “where society has problems,” Jörnow said. That includes investments in greentech, transportation and the future of work, he said (particularly areas such as tools and platforms for freelancers).
The company’s closing of the fund speaks of what appears to be a split in the world of tech investing. While funds and companies targeting much larger companies and later stage companies may see large losses in their portfolios, there remains confidence among those backing the funds, the limited partners, that investors targeting earlier ( and smaller) stages still many have opportunities ahead. “The higher the valuation before the contraction, the bigger the decline,” he warned.
It also helps to have a history of good bets. Jörnow noted that the company’s goal was actually 900 million euros. His takeaway from the relatively quick shutdown and exceeding that figure:
“LInvestors think it’s a great idea to support early stage VCs with a much longer holding period,” he said. On average, EQT expects exits to happen in 2031, “when the world will look different from today,” he added. “If you support the best founders, they will grow startups regardless of the current macro environment.”