When Seedcamp was launched in 2007 by a group of 30 European investors, the term ‘accelerator’ was not yet in vogue, even though it was modelled almost completely after Y Combinator (the biggest startup accelerator of all).
Ironically, you won’t find the word ‘accelerator’ on Seedcamp’s website today, as the investment company would rather be known as a ‘first round fund’.
Almost a decade ago, however, Seedcamp was pioneering a new way to provide European tech startups with quality mentorship, early-stage investment and a programme designed to boost growth.
Fast-forward to today, and Seedcamp has backed more than 230 technology startups from across the globe, and it’s enjoying a banner year almost a decade after its founding by partner Reshma Sohoni and noted investor Saul Klein.
But how did that first batch of startups from back in 2007 end up performing, and how did Seedcamp’s first fund do before the firm went on to raise a $30 million seed fund in 2014?
Today, Seedcamp is publicly sharing performance data for the first time. The company’s always been keen on sharing data, which I guess is an easier decision to make when the numbers look as good as they do:
Seedcamp’s first fund, which was about $3 million in size, has returned over 1.5x thanks to a number of exits (Stupeflix > GoPro, Brainient > Teads, uberVU > Hootsuite, etc.). The Stupeflix investment, in particular, proved to be a hit, giving Seedcamp a 60x return and thus enabling the firm to give a decent return to its limited partners almost on its own.
It’s also worth noting that this is only preliminary data; from the 22 companies Seedcamp backed out of its initial fund, 8 were successfully exited and six were shut down – but that also leaves 8 companies that are still around and (self-reportedly) growing. Seedcamp says it envisions “potentially reaching a 8x-10x return on money invested”.
Aside from the solid performance from its first seed fund – which puts Seedcamp squarely in the top quartile of funds started in 2007, with an internal rate of return of 14.3%, according to data from Cambridge Associates – the London-based investment firm is having a really good 2016 so far.
To wit, in the first three quarters of this year, Seedcamp has already recorded $250 million worth of ‘exits’ and follow-on funding for its portfolio companies (split roughly 50/50, according to Sohoni). In total, Seedcamp says the companies it’s invested in have raised $500 million from VCs like Union Square Ventures, Index Ventures, Andreessen Horowitz and Felicis Ventures, and some of the startups it invested early in have been acquired by the likes of Airbnb, Stripe, BBVA and Lynda.com (LinkedIn).
These days, it’s focusing heavily on insurtech, health tech, legaltech, proptech and fintech, Seedcamp says. Its overall portfolio boasts some high-potentials, including TransferWise, Revolut, EDITED, FinanceFox, Codacy, Pleo and Try.com.
Commenting at Seedcamp Week, co-founder and partner, Reshma Sohoni said:
“People often think tech businesses just become an overnight success but this couldn’t be further from the truth. Things can, however, happen in a ‘moment’ and that’s definitely what we’re experiencing right now. The moment where nine years of investing leads to a tsunami of maturation and therefore large growth rounds and exits.”
It will be interesting to see what the rest of the year will bring.
(Full disclosure: Carlos Espinal, a partner at Seedcamp, is a personal investor in Tech.eu)
Featured image credit: Raphaël Labbé / Flickr