Today, Kindred Capital has closed its second seed fund at approx. €88.7 million. Through its ‘Equitable Venture’, the firm gives exceptional seed-stage entrepreneurs co-ownership in the fund that invested in their businesses.
Since its launch in 2015, the firm has now invested in 39 technology companies across Europe and Israel, with ten of those investments coming from the second fund. Kindred has been investing from the second fund over the last 12 months.
The innovative ‘Equitable Venture’ model will be continued for Kindred’s second fund. In Fund I, Kindred projects that around €5.4 million will be returned to founders, which would otherwise have gone to General Partners of Kindred.
Through its Equitable Venture programme, Kindred Capital shares its carry with the founders in which the fund invests. The idea is that this encourages a collective model, in which founders actively help each other achieve their goals.
This has also had a positive impact on deal flow, with entrepreneurs sourcing 38% of Kindred’s dealflow at the top of the funnel.
A further testament to Kindred Capital’s portfolio, and the equitable venture model, is that 54% of the Fund I portfolio have raised Series A funding within 3 years. On average, only 19% of startups that raise seed funding go on to raise Series A within 36 months, according to data from Dealroom.
Fund I made 29 investments across Europe, including: Five, the firm building much of the software layer for autonomous vehicles; Paddle, which revolutionises how hundreds of software firms sell their products; Pollen, the invitation-only, peer-to-peer marketplace for experiences and travel; Farewill, the company which has overhauled the antiquated will-writing industry; Disperse, the AI enabled construction startup focusing on improving on-site productivity; LabGenius, the company using machine learning to discover new protein therapeutics; Flagstone, the cash deposit platform; and Animal Dynamics, the company using deep science to understand naturally evolved designs to build high performance machines.
Kindred has already begun investing from the second fund, and has led 10 seed investments in companies such as BotsAndUs, Gravity Sketch and Beit.
The Partners of Kindred Capital are all successful operators, turned investors. In their founding roles prior to Kindred, the partners raised around €85 million and created around €1.2 billion in value. As investors, they have deployed around €468 million, creating around €1.6 billion of value, of which around €741 million is realised.
Kindred has also put in place a strong support team with deep expertise across operations, talent, technology, product, and marketing, relentlessly focusing on what founders say they need from investors.
Commenting on the closing of Kindred Capital’s second fund, Partner Leila Zegna says: “We are delighted with the success of our first fund, and excited to announce that our second fund was significantly oversubscribed and which we’ve now closed at £81 million. We originally entered the UK seed stage ecosystem with ambitious goals, to invest in around thirty high quality UK technology companies per fund, and to introduce ‘Equitable Venture’ as a totally new way of practicing our craft.
We are proud of progress that has been made. Of the companies we’ve invested in, 70% have raised additional capital, with many raising at considerably higher valuations from excellent investors, including Index, Balderton, Northzone, Obvious, Lux, Notion, Highland and 83North.
This is the right size for a seed fund in Europe, it will enable us to invest in great companies, and keep the majority of capital in reserve to follow on. We look forward to working with many more phenomenal companies on the road ahead.”
Stan Boland, CEO and founder of Five, which is a portfolio company, commented: “We’re really pleased to have chosen Kindred as one of our main investors, four years ago. They’ve worked alongside us in a true partnership, offering real support and valuable advice along the way. Kindred’s pioneering equitable venture model also means that we feel part of the wider Kindred Collective, where every founder and adviser is motivated to help each other to succeed.”
Additionally, the fund was oversubscribed, and includes notable LPs: University of Chicago, Industry Ventures, Generation Ventures, Sands Capital, British Patient Capital, Isomer, and Legal & General. As well as institutions, Fund II has attracted great founders like Taavet Hinrikus (TransferWise), Carsten Thoma (Hybris), and Rishi Khosla (Oak North), amongst others.