Ada Ventures, a brand new Berlin-based VC firm, has raised $34 million for its first fund, intended for "overlooked founders who are building companies for under-served customer groups." Inspired by Ada Lovelace, the computer science pioneer in the nineteenth century, the firm aspires to diversity, inclusion, and equal access to capital.
Ada highlights the skewed distribution of VC funding with a few statistics based on gender, racial, socio-economic, and geographic factors: 92 in every 100 dollars invested in Europe goes to all male teams, 83 percent founders are white, 82 percent are university educated. In the UK, 72 percent of VC money is invested in London alone.
The firm wants to target globally significant problems that have been overlooked by venture capital, including aging populations, women, and young people under 20. To this end, Ada will invest in around 30 startups, writing a £500,000 first cheque early on — post-initial product but pre-larger seed round. About half of the fund will be reserved for follow-on investments.
Founding partners Francesca Warner and Matt Penneycard are experienced early-stage investors and have worked together for four years, at Downing Ventures, Seraphim Capital and Techstars. Francesca is also the co-founder of non-profit Diversity VC.
She commented: “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.”
Unique to the firm’s structure is the team of Ada Scouts, a growing network of people who are positioned and incentivised to bring in opportunities that fit the firm’s investment strategy. The firm says, “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.”
British Business Bank will make cornerstone investment of up to two-thirds of the total fund size, thanks to its Enterprise Capital Funds programme. Other investors include Atomico, TransferWise founder Taavet Henrikus, Supercell’s founders, Arlan Hamilton of Backstage Capital, and BlueSky Capital.
Ken Cooper, Managing Director of Venture Solutions at the British Business Bank, said: “Ada Ventures is an important step in the right direction for the UK Venture Capital ecosystem, with a fund focused on democratising VC investment regardless of gender, race, background, or location. By backing first time fund managers and taking cornerstone positions through the Enterprise Capital Fund programme, the Bank can support funds like Ada Ventures in creating greater diversity within start up funding.”
In fact, Ada has already made seven investments to date, five of which the fund has led. These are Predina, a road traffic accident risk monitoring technology; Inoviv, a companion diagnostics tool; Motley, a vertically-integrated jewellery company; Ferly, a women sexual wellbeing company; Huboo, a multi-channel fulfillment service for e-commerce businesses; Polipop, the world's first flushable sanitary pad, and Juno Bio, which is working on decoding the vaginal microbiome to increase the success of IVF.