Led by former Atomico co-founder Mattias Ljungman, London-based Moonfire Ventures has raised $115 million with its second fund and will continue to invest in European early-stage startups that intersect with Web3, AI and AR/VR, including fintech, future of work, gaming, and e-health.
Moonfire's typical ticket size lands in the $1-2.5 million range, although they're not shy of going a bit smaller, particularly when co-investing or when founders prefer to raise a smaller initial round. The second outing for Moonfire is supported by large institutional investors including US state endowments, fund of funds, and the usual family offices suspects. In a strong show of support, over 95% of the LPs from Moonfire's first fund returned to the table for the second fund, perhaps even more notable as the second fund size has increased by 50% as well as the creation of the firm's first Opportunity Fund.
Moonfire first appeared on the scene in 2021 with its inaugural fund at $60 million, and while the organisation has led 23 deals and participated in another 17 alongside a list of who’s who; Sequoia, Accel, Index, and General Catalyst, be wary of calling Moonfire a Venture Capital firm.
According to Ljungman, Moonfire is just as much a VC-focused tech startup as it is a VC firm, and team members are project managers just as much as they are investors.
Allow me to explain.
For the sake of name recognition, let’s queue the dream sequence music and flutter back to a time when EQT Ventures unveiled its Motherbrain project, one that uses “Big Data and Machine Learning to give EQT a unique edge.” With me so far? Good.
Where Moonfire builds on this (and many other in-house tools developed by various funds to gain market advantage) is by sprinkling ever more AI (albeit custom-built, proprietary models) into the batter and baking up a cake that allows the firm to review up to 50,000 companies every week, a figure according to Moonfire, 600x more than the average of a traditional VC.
One example of this approach can be seen with Moonfire portfolio company LiveFlow. Having been flagged by Moonfire’s AI engine, the firm led the pre-seed round alongside Seedcamp and then leveraged the Moonfire team’s technical know-how to construct a recruitment funnel that led to the hiring of former Web Summit Software Engineer / Product Engineering Lead Evan O’Brien as CTO. LiveFlow went on to raise a $4 million seed round, at more than double its initial pre-seed valuation.
Whereas Bessemer has earmarked $1 billion to invest solely in AI startups, Moonfire is taking the alternative route, and throwing its weight behind AI to find the best early-stage startups to support.
On the firm’s AI-driven approach, Ljungman commented, “We are entering a new decade of AI that is transforming the possibilities of technology and redefining how tech companies are built through greater access, efficiency and product quality. We want to be there for the founders at the earliest stages powering their growth and being true partners from the very beginning. Europe has been a leader in AI and we find our best fit is to support the next generation of founders solving some of our greatest challenges within health, work, finance, and gaming."