Ada Ventures has raised a new USD34 million (GBP27 million) fund which will invests in ‘overlooked’ company founders.
At present, 92 in every 100 dollars invested in Europe goes to all male teams, 83 per cent founders are white, 82 per cent are university educated. In the UK, a quarter of investment committees saw no female founders in 2017 and 72 per cent of Venture Capital funding is invested in London alone.
Ada Ventures was founded to change that. Ada Ventures is a first-cheque seed fund, and is on a mission to make venture capital truly accessible to the best talent in the UK & Europe, regardless of race, gender or background.
British Business Bank will cornerstone the fund through its Enterprise Capital Funds (ECF) programme, which supports new and emerging VC fund managers who target the early stage equity gap. The programme combines private and public money to enable equity investments in high growth businesses, and since its inception it has committed around GBP1.3 billion (including third party investment) to facilitate finance to 526 smaller UK high growth businesses.
Other investors include global funds such as US-based BlueSky Capital and Dubai based Rasmala alongside individuals from across the global tech ecosystem, including TransferWise co-founder Taavet Henrikus, Supercell’s co-founders, Backstage Capital’s Arlan Hamilton. The fund is backed by leading figures from industry such as Dame Cilla Snowball, Silicon Valley law firm Wilson Sonsini and later stage funds Atomico and Inovia Capital.
It is the fund’s aim to have the most diverse pipeline, and portfolio, of any fund in Europe. Typically, Ada Ventures will look to invest a £500,000 first cheque – which comes post-initial product but pre-larger seed round – and reserve roughly half the fund for follow-on investments.
The fund will make around 30 investments in companies targeting globally significant problems, particularly for groups that are overlooked by venture capital, including ageing populations, women, and young people under 20. Key sectors are healthcare, consumer and the future of work.
Founding partners Francesca Warner and Matt Penneycard have worked together for four years, at Downing Ventures, Seraphim Capital and Techstars. Francesca is the co-founder of non-profit Diversity VC.
It also deploys Ada Scouts, a growing network of ‘scouts’ who are positioned and incentivised to bring excellent opportunities, in line with the firm’s investment strategy, to the table. Ada Scouts are vital: innately grassroots, they mirror the startups Ada wants to find and support, with the opportunity, via a finder’s fee and a longer term aligned incentive to become investors themselves. Ada Ventures has already agreed terms on two investments through this network.
Francesca Warner, founding partner, Ada Ventures, says: “Having worked in Venture for the last four years, and through co-founding Diversity VC, I’ve seen how structurally narrowly-focused the industry is, investing in the same founders building products and services for the same customers. This is a huge missed opportunity. Ada Ventures is here to change that. We’ve redesigned our funnel of opportunities with Ada’s scouts to give us wide exposure to founders who come from diverse backgrounds and who are solving some of the worlds most significant problems, problems that have been overlooked by the current crop of founders and VCs.
“Fundamentally, Ada Ventures is about true inclusion, and we will invest in anyone, no matter what they look like and where they come from. We are incredibly proud to have such an experienced and supportive group of investors partnering with us to make Ada Ventures the most inclusive fund in Europe.”
Ken Cooper, Managing Director, Venture Solutions at the British Business Bank, says: “We know from the British Business Bank’s own research that more needs to be done to increase the diversity of entrepreneurs backed by venture capital investment. Not investing in a diverse mix of business founders is a missed opportunity for the UK economy and Ada Ventures, with their fund focused on democratising VC investment regardless of gender, race, background, or location, is an important step in the right direction to address this.
“Our Enterprise Capital Fund programme has a track record of successfully backing first time fund managers like Ada Ventures, with our cornerstone support helping to unlock further investment from other investors. We are always looking out for good quality funds, with strong differentiation, that we can back to invest in the equity gap.”
Olivia Ahn, co-founder & CEO of Polipop, the world’s first flushable sanitary pads, says: “We approached many investors to support Polipop. As a FemTech company with a strong sustainability mission, we found investors were hesitant in an unfamiliar market. From the first meeting with Ada, it was clear that Check and Matt were different. They were not only fantastic advocates for the FemTech space but also for female and minority founders.
“They were transparent with their process and aligned with our vision which is why we were delighted to have Ada as our lead investor. With Ada leading our pre-seed round, we quickly attracted other investors to come on board and closed our £500k round in two months. Ada has been hugely supportive of Polipop and we’re excited about the impact they’ll have on other companies in markets that are similarly overlooked.”
