Today Ada Ventures closes an oversubscribed £63 million second fund from institutional LPs. New LPs in Fund II include The Export and Investment Fund of Denmark (EIFO), The University Of Edinburgh, Molten Ventures, and Legal & General Capital.
Returning Fund I LPs Atomico, Big Society Capital, and the British Business Bank join them. Several founder investors are also participating, including Taavet Hinrikus, founder of Wise, and Illusian, a family office founded by Ilkka Paananenfi, co-founder and CEO of Supercell.
Launched in 2019, Ada's Fund I portfolio — which includes Huboo, Boundless, Greenworkx, and Bubble — is on track to generate £100 million of revenue in 2024
The value of inclusion in practice
The fund has developed and now pioneers an 'Inclusive Alpha®' approach, which supports the coexistence of' alpha' ideas and a commitment to inclusion.
This investment strategy centres on beating the market using funds from an inclusive infrastructure and investing approach. Ada Ventures embeds this commitment to inclusion at every stage of the investment process.
This includes providing founders with access to mental health support and a European-first commitment to supporting parents in their portfolio with the cost of childcare. Since launching in October, nearly 15 percent of the firm's portfolio companies have already embraced this initiative.
An analysis conducted in February 2024 also reveals that Ada Ventures is:
- 14x more diverse in terms of gender and race/ethnicity than the broader VC market across all benchmarks.
- 74 percent of portfolio founders are from an underrepresented background.
- 48 percent of Ada Portfolio companies have a woman founder (compared to 18 per cent across the wider VC market).
- 44 percent of Ada Portfolio companies are led by ethnic minority founders (compared to 9 per cent of companies receiving funding in the wider VC market).
The firm also pioneered the use of a Scout and Angel network, with nearly 100 scouts across the UK, and a 20-strong cohort of "Ada Angels," who each have access to an investment pot of up to £50,000.
To date, 30 percent of investments from Fund I and Fund II have been sourced through the Ada Angels or Ada Scout network.
With its Fund II capital, the team will invest between £250k and £1.5 million in Pre-Seed and Seed-stage startups, with a significant amount allocated for follow-ons.
It plans to make between 10 and 12 investments annually in companies building breakthrough ideas across climate equity, economic empowerment and healthy ageing.
Check Warner, Co-Founding Partner at Ada Ventures, comments:
"We're thrilled to announce the final close of our second fund and share more data around the diversity and performance of our portfolio. We believe these metrics show just how powerful and effective the Inclusive Alpha approach is.
We've worked incredibly hard over the last five years to develop the systems and processes to turn our ambition to build a truly diverse and inclusive fund into reality.
Strong returns are strongly correlated with inclusive investment. We want other funds to copy this blueprint.
The excuse that diverse talent isn't 'out there' is a cop out. We have proven that you can build a thriving, inspiring portfolio of diverse founders building breakthrough products and hugely valuable businesses."
Chris Hopkins, Managing Director, Venture Capital, Legal & General Capital, comments:
"We are pleased to have invested in Ada Venture's second fund and support their wider investment strategy to broaden our access to capital and address the lack of diversity within the UK and European VC ecosystem.
Diverse teams drive growth and better outcomes, and Ada Ventures inclusive approach is targeting the emerging cohort of startups who are developing innovative solutions for society's greatest challenges.
The oversubscribed second fund is a fundraising success story and signals the growing industry recognition on these issues."
Lars Nordal Jensen, Head of Fund Investments at The Export and Investment Fund of Denmark (EIFO), comments:
"We are delighted to join Ada Ventures as investors in their second fund, as they keep expanding their Inclusive Alpha approach internationally.
Ada Ventures is led by a savvy team that has developed a systematic and more inclusive approach to venture capital, which is why we believe they are well-positioned to capitalise further on the underlying business opportunity that exists when you invest in a more diverse set of founders.
Ada's attitude to investments shows that you don't need to sacrifice great returns for your LPs, in order to build a more diverse portfolio."
Lead image: ADA Ventures. Photo: uncredited.
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