Harry Stebbings — the UK podcaster who broke into the world of tech from total obscurity by building a brand and audience around a regular series of 20-minute interviews with venture capitalists and founders — parlayed that fame into becoming a VC himself. Now, he has closed his third investment vehicle, his biggest yet. 20VC, the firm named after the podcast series that made his name, has closed a $400 million fund.
At a time when European technology companies continue to lag behind those from U.S. at almost every stage of investment, the primary focus for fund 3 will be on backing startups in the region, using Stebbings’ media nous and connections to bring more attention to them overall.
“I’m really fed up of everyone shitting on Europe, Ingrid,” he said in an interview earlier today. “We have unbelievable companies, and we have incredible people. We need to make Europe great again. MEGA!” He added with a giggle.
$125 million of the fund will be dedicated to seed investments, and $275 million will be going to Series A rounds. The fund has yet to be deployed, Stebbings said: 20VC is still investing out of its second fund, $140 million that it raised in 2021.
This latest fund was raised in four weeks, a relatively quick turnaround considering the constraints that continue to swirl around venture capital even as we very slowly recover from the post-pandemic downturn.
There are a few other notable things to take from the news:
— Despite the tough climate out there for founders, this is a reminder that there is money out there for investing, and the pot is clearly still growing.
— Europe remains an interesting opportunity for U.S. LPs when it comes to startups. Stebbings pointed out that a majority of the backers in this fund are out of the U.S., with more than half of that institutional money. “I would never get into MIT as a student,” Stebbings said. “I’m thrilled that they decided to give me money to invest.”
— European VCs have a strong suit to play when it comes to connecting with European startups.
VCs like Accel, as well as successful founders who have become investors, have an established presence in London and the wider region. Yet a number of them are still putting money into 20VC. Why? Stebbings has put a very personal face onto his firm and he helps them and the others hedge their bets.
In all, 20VC said 40 founders from companies including Atlassian, Candy Crush, Canva, Capital One, Datadog, Deliveroo, Eventbrite, Iconiq, Procore, Spotify, UiPath and Vinted; as well as general partners from Accel, Benchmark, Coatue, Cyberstarts, Founder Collective, Founders Fund, Khosla, NEA and TCV and Thrive, are all in the fund as well.
“We are the feet on the ground for the US funds too,” he said.
Stebbings has tapped into the zeitgeist around being an online creator who has built a successful business (and yes, brand) around his content momentum. In his case, that business is in the area of venture capital, but he leverages his profile to help open doors and get in on term sheets.
“The media platform has really helped,” he said. 20VC was essentially a “micro VC” when it debuted in 2020, with just $8.3 million to invest, typically to piggy back in seed rounds. Now it gets upwards of 50 million views on TikTok and YouTube — large numbers for what is effectively VC and startup inside baseball. “Having your Sam Altman’s on the show, your Marc Benioff’s, it makes a big difference. Founders do really want to take your money.”
Stebbings himself is not a technologist by training — he was at university studying law when he started 20VC and dropped out when it all took off — and he makes no attempts to hide this.
“I don’t follow technology,” he said when I asked him if any categories are standing out right now. “I follow great entrepreneurs. I think it’s absolutely bullshit that we think we’re smarter than markets. If there’s one thing we have to learn, it is that great founders shape markets. And if that’s the case, my job is to simply find the best founders before anyone else.”
Beyond that, his selling point from early on has been that he brings operational experience to his portfolio companies.
“20 VC has done over £10 million in revenue and is a very profitable and sustainable business,” he said. “No, I’m not a technology founder, but I am an operator. I work seven days a week, 15 hours a day, and I have done for years.”
Now, that has been widened out, with 20VC operating what Stebbings describes as “sub-funds” in categories like sales, product and growth, where he has teams, also run by people with operator experience, who have their own carry and seek out companies (and founders) that look interesting and could benefit from their practical advice in these areas.
Despite breaking the mold for how VCs are formed, Stebbings has yet to change the economics of VC, however. It remains “like any other market,” he said: “one percent of the companies make ninety percent of the gains.”
That might not be such a bad thing? “We can do more to normalise that in Europe, encouraging trying and failing,” he said.
For VCs that extremely uneven math ironically might spell more opportunity for big wins, not less, in his opinion. “Venture returns, on the whole, will go down [but] for 1% of firms, they will be much, much bigger than ever, though, and better than ever, because the size of the outcomes is so much larger than ever,” he predicted.
Having said all that, Stebbings is still waiting for his “MEGA” payout. With a lot of the firms he’s invested in still relatively young, and the IPO market still pretty dead, and some of the earliest companies actually pointing to the U.S. focus that 20VC had when it first launched, there are no massive exits on the 20VC portfolio list just yet. The closest, he said, is probably Tripledot, the London gaming studio that appears to be valued at just over $1 billion, per PitchBook, and last raised in 2022, a round worth nearly $180 million that was led by 20VC.
Source link : https://techcrunch.com/2024/10/15/20vc-closes-new-400m-fund-to-make-europe-great-again-says-harry-stebbings/
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Publish date : 2024-10-15 11:15:00
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