London Seed Fund Grows $23 Million Investment to $446 Million

A London-based seed fund reported that its 2014 vehicle grew from $23 million to $446 million after early investments in European startups. The fund achieved a 50.3 percent net internal rate of return and a 13.32 times distributed-to-paid-in multiple on that vehicle.

The same fund said it has raised $220 million for a new seed vehicle and $100 million for a growth vehicle. These amounts are nearly 100 times larger than its first $2.7 million fund raised in 2007.

The fund typically writes checks to around 100 companies per vehicle rather than concentrating on a smaller number of startups. It reported a 1,000-times return on an approximately $400,000 investment in digital bank Revolut, which is now in talks for a tender offer above $100 billion.

The fund has sold part of its Revolut stake to return capital to investors. Its 2017 vehicle has returned 0.62 times capital to investors while valuing remaining holdings at 3.9 times cost.

Data tracked by TrackVC showed that European funds raised in the same years returned 1.88 times and 0.45 times on average. A sample of U.S. funds tracked by Carta returned 0.31 times on average during the comparable period. The fund's managing partner said European governments and corporations should increase purchases from startups rather than only buying from established suppliers.