- Berlin-based VC fund Fly Ventures has raised €53 million ($60 million) to invest in early-stage deep tech and automation startups in Europe.
- Established in 2017 by two ex-Googlers, Fly Ventures has seen two of its prior investments Bloomsbury AI and Scape both exit to Facebook.
- "Startups are now more willing to try crazy things, things that are commercially tricky," Gabriel Matuschka, Fly Ventures cofounder and general partner, told Business Insider in an interview. "Frankly what we're seeing in Europe has been happening for decades in the Valley and that is people trying to do really difficult things and succeeding."
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Berlin-based VC fund Fly Ventures has raised €53 million ($60 million) to invest in early-stage deep tech and automation startups in Europe.
Established in 2017 by two ex-Googlers, Fly Ventures has seen two of its prior investments Bloomsbury AI and Scape Technologies both exit to Facebook. The fund invests between €500,000 and €1.3 million into early-stage opportunities, with Fly Ventures setting their sights on the UK ecosystem having recently brought in former Entrepreneur First investor Matt Wichrowski.
Fly Ventures has LPs including the European Investment Fund (EIF), AXA, and KfW Capital many of whom supported the company's first fund meaning coronavirus did not adversely affect Fly's fundraising.
The areas of deep tech and automation space have been growing rapidly in Europe in recent years given the improvements to and accessibility of new technology, particularly in AI, according to Gabriel Matuschka, Fly Ventures cofounder and general partner.
"When we launched our first fund most of the feedback questioned how big AI and machine learning were going to be," Matuschka told Business Insider in an interview. "You don't hear that anymore, because every company is using these processes. Underlying core technologies have become more available and accessible to people which has opened up problems which were not previously possible."
The result is that new technical challenges have emerged in sectors as diverse as self-driving cars, biotech, and quantum computing which are being tackled by European startups.
"Startups are now more willing to try crazy things, things that are commercially tricky," Matuschka said. "Frankly what we're seeing in Europe has been happening for decades in the Valley and that is people trying to do really difficult things and succeeding."
London calling?
Fly Ventures has used a data-driven approach to find companies that fit its thesis. Matuschka says that keeping their fundraising to a small, manageable amount helped keep the fund focused on areas where their expertise and interests are consistently aligned.
To that end, the fund uses a combination of structured and unstructured data sources to pull in information about companies and founders who fit useful profiles. Browser plug-ins and other software that help aggregate data have helped the company look at over 29,000 companies many of which are then, somewhat unconventionally, approached for investment by the fund rather than the other way around.
"We define processes that find us things we like to invest in as a company," Matuschka added. "Data helps to enhance the speed at which a human can do the job we do."
Examples might include startup founders with a PhD in a deep tech subject from a top university, with Oxford and Cambridge high on the list. Similarly, startups founded by employees from other successful companies are in demand. A notable example includes Salv, an anti-money laundering startup, founded by former TransferWise employees.
Alongside the hire of Wichrowski, Fly Ventures' second fund sees existing members Marie Wennergren, Felix Wolf, and David Malinge promoted to partner.
Despite not having a physical presence in the UK (with no likely change to this due to COVID-19), Britain will be a core focus for Fly's second fund. "Research from the UK plus the momentum from companies there has created new possibilities," Matuschka said.
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