Draper Esprit, a London-based publicly listed VC firm, has entered into a strategic partnership with Germany's early-stage VC Earlybird. Draper also invested €18 million in Earlybird's recent €175 million “Digital West” fund and committed to invest a further €17 million per year until 2022.
The goal of the unusual partnership is to “share deal flow and resources to co‐invest in high growth technology companies across Europe,” Draper stated in a press release. The move is also the first step towards a merger of the two investment firms, according to Draper’s chief executive and co-founder Simon Cook, quoted by the Financial Times.
Currently, Draper Esprit has offices in the UK, Ireland, and France, which makes Germany a logical next step in the firm's geographic expansion.
“Earlybird has built a leading VC position in continental Europe, and Draper Esprit has an exceptionally strong position in the UK, Ireland and increasingly across Europe,” said Hendrik Brandis, co‐founder of Earlybird. “Earlybird has significant backing from mostly institutional private investors, and Draper Esprit has managed to very successfully access public capital markets, funds which we can co‐invest alongside. We believe this creates a very strong partnership of significant scale with many potential benefits for all parties—whether entrepreneurs, investors and our respective firms.”
Draper and Earlybird will operate and manage their portfolios independently from their respective offices across Europe. The firms expect to see a total of some 15 to 20 new deals per year, from seed-stage to Series C.
The UK-based firm has issued a small number of new shares representing some 0.07 percent of the company in exchange for a minority stake in the management company of Earlybird's “Digital West” fund closed yesterday. In the announcement, Draper also disclosed that €36 million from the fund has already been invested in 13 companies.