Early stage VC firm Nauta Capital, which has offices in London, UK, Barcelona, Spain and Boston in the US, has closed out a 2016 fund raising — capping it..<\/b>
Early stage VC firm Nauta Capital , which has offices in London, UK, Barcelona, Spain and Boston in the US, has closed out a 2016 fund raising \u2014 capping it off at $170 million.
The firm has already closed eight investments with this fund, which had a first closing at $70M, with a further $100M added in parallel \u2014 now closing oversubscribed vs the original target for the fund of around $120M, according to general partner Carles Ferrer. (Its prior funds were $55M raised in 2006, and $115M in 2010.)
Nauta has a focus on what it describes as \u201ccapital-efficient Series A software propositions\u201d: aka startups that take a leaner approach to taking on funding vs money-gobbling wannabe unicorns. Its areas of tech interest include b2b software, digital media and \u201cenabling technologies\u201d for mobile and the Internet \u2014 with an overall focus on large markets with \u201climited previous technology impact\u201d.
\u201cWe believe the VC model has been lately too centered around the Unicorn concept, that is too many times return-unrelated,\u201d Ferrer tells TechCrunch. \u201cToo many companies are pushed to grow more and more but too early, and for that, raise too much money, again too early. Many of them don\u2019t have enough evidence from the market to know if they should be spending so much money.
\u201cIf it happens to be too early, that company may end up wasting so much money and energy and having a conflict between equity raised, valuation, and its performance. This too often results in good companies that are actually severely damaged by a poor funding strategies.\u201d
Ferrer argues that the risk for startups raising too much too soon can be especially \u201cdelicate\u201d in the b2b sector \u2014 describing the firm\u2019s philosophy for startups here being \u201clean for a good while is beautiful\u201d.
\u201cOnce you have enough proof, then it is time to run, but not before. By being lean you maximise chances to obtain premium multiples for yourself and entrepreneurs, at any exit valuation. Too many companies cannot make good money for their investors unless they become a semi or full unicorn and we think this is wrong,\u201d he adds.
Staying away from risky unicorn bets is also pragmatic, given falling startup valuations and the clutch of down rounds in recent years. Albeit, investors in Europe do typically ask to see a clearer path to monetization earlier vs their Silicon Valley counterparts.
The 40+ startups in Nauta\u2019s portfolio thus far include companies like Brandwatch, Fizzback, GreatCall, Eyeview Digital, Scytl , Basekit, ForceManager, Marfeel, Getapp, Privalia (which exited to Vente-Privee last year ) and Social Point (which exited to Take-Two earlier this year ).
While the investments the firm has made most recently, with the 2016 fund, are: in the UK and Ireland: CloudIQ, BeMyEye and ChannelSight; in Spain: Nextail, Geoblink and Lodgify , and in the Boston area: Content Raven and Connected2Fiber.
It says it plans to invest in around 25 companies in total with the fund \u2014 mostly at Series A level, though Ferrer notes there \u201cmay be a reduced number of earlier deals (A minus) when we know very well the entrepreneur\u201d. He says the firm typically invests between $1M and $7M per startup, but describes \u201cthe sweetspot\u201d as \u201cusually as a first ticket $1M to $3M\u201d.
What makes a team catch the firm\u2019s eye? Responding on this he describes its investment thesis as \u201cvery disciplined\u201d, saying: \u201cWe only do what we understand very well and try to stick to it. Capital efficiency is a concept our entrepreneurs believe in also very passionately.\u201d
Overall, he says the approach is to look for industries that have not been disrupted and then pick \u201cthe best companies to do it\u201d, citing a couple of startups it\u2019s backed ( InCrowd , BeMyEye ) that are aiming to disrupt the \u201chuge and inefficient market research industry\u201d, for example.
In terms of geographical spread, Nauta has full investment teams in its three locations, and Ferrer says from London it\u2019s able to cover the whole of the UK and Ireland plus \u201cother continental European countries where companies are born and naturally migrate to London as a hub\u201d; likewise covering Spain and Portugal \u2014 and looking further north into Europe \u2014 from its Barcelona base.
\u201cWe look at other geographies in Europe when companies migrate to our hubs, or have a special interest on our geographies (where we have a team). Eventually, we can learn enough from those geographies to probably in the future invest more actively there too. We think it is so important to have an investment team based where the dealflow is originated. We also have a Boston presence where we cover the east coast and also help European companies migrate,\u201d he adds.
Nauta\u2019s current fund has been backed by a group of international investors, based in the UK, Continental Europe, Latin America and China, which it says include leading Institutions (Fund of Funds, Financial Institutions, Insurance Companies, Endowments and government agencies) and large Family Offices.<\/p>\n