When Reshma Sohoni cofounded London-based seed fund Seedcamp back in 2007, the pitch was simple: back Europe’s best founders. Over nearly two decades, the fund wrote some of the earliest checks into companies like automation startup UiPath, Danish fintech Pleo and most notably digital bank Revolut.
Those investments helped turn the $23 million that Seedcamp raised for its third fund in 2014 into over $446 million. The British fund’s 50.3% net internal rate of return puts it in an exclusive class only rivaled by the best of big name American funds. Those investments and more have made Sohoni and Seedcamp’s managing partner Carlos Espinal into fixtures on the Midas Seed List and Midas List Europe.
Now Seedcamp is announcing a new set of funds that are nearly 100 times the size of its first $2.7 million fund. It has raised $220 million for a new seed fund, and a $100 million growth fund to back the breakout companies from its portfolios.
“Our vision is that exceptional European and British talent can go global and win. That’s why we are here 2 decades later and we are all aligned on supporting that talent,” Sohoni says. “Founders really want an investor that has that global view, can give advice and put them in the rooms that matter.”
Sohoni relocated to Miami in 2021 but continues to run the fund, while most of the Seedcamp team continues to invest out of London. In 2022, Seedcamp brought on an investor in New York to back and support its portfolio companies expanding in the U.S.
Seedcamp has an unusual strategy compared to other seed funds, which often make only a handful of investments into startups. Sohoni and her team have invested in as many as 125 startups from one fund, and now typically write around 100 checks per fund. “We don’t index the startup market, we index tier one founders,” she says.
Venture capital funds in the United States rarely disclose their investment performance. It’s even rarer in Europe. The most important metric for a venture fund is how many dollars it pays back for each buck invested, known as Distributed to Paid-In Capital (DPI). Seedcamp shared that its third, and best performing, fund has already paid out 13.32x on its initial investment. The European VCs tracked by data platform TrackVC show that funds raised in the same year have paid out on average 1.88x on each dollar invested.
Revolut was a major driver of that success. Seedcamp invested around $400,000 into the startup that is now in talks for a reported tender offer at a valuation over $100 billion. The fund earned a return of over 1000x on the investment, according to sources close to the fund. Seedcamp has since sold some of its stake in Revolut to return capital to investors, according to The Financial Times.
Seedcamp’s later, larger funds have not yet repeated this stellar performance but have still outperformed peers. Its fourth fund raised in 2017 has paid back 0.62x for investors. It includes some big name AI bets like video platform Synthesia, which was valued at $4 billion in January, and data center operator Fluidstack, which was reported in April to be in talks to raise at a $18 billion valuation. Seedcamp values the still-growing startup stakes in this fund at 3.9x the value of each dollar invested (Total Value to Paid-In Capital). TrackVC’s data shows that European funds of the same era had paid out 0.45x on average, while startup data company Carta shows that the sample of U.S. based funds it tracks returned 0.31X in DPI.
The Seedcamp partner thinks that European governments and corporations need to do more to support its startups by signing deals and awarding contracts to new players rather than only buying from established names. “We are in a new paradigm. Europe and the U.K. has this massive GDP and needs to bring it to bear as customers,” she says.