Why We Raised a $60m European Pre-Seed and Seed Fund

We believe that European tech and venture is going through a renaissance and now is the perfect time for a new fund to support founders at the earliest stage.

So far in 2021, there has been a stampede of unicorns. The European tech ecosystem has seen unicorns created at the rate of at least one a week. According to Crunchbase, there were 16 new unicorns created vin the first quarter of 2021 and the amount invested in Europe in just three months ($21.4bn) is already half of the total for the whole of last year – which itself was a record year for European dealflow.

This newfound momentum is also amplified by a new generation of founders coming out of these success stories, which is in turn breeding further success. We want to be there for this next generation of ambitious European founders as they start new companies with bold ambitions.

It could not be a better time to launch a new seed fund to support the industry. Our first $60 million fund marks Moonfire’s first official moment but, of course, we have been working away in the background over the last year, building the team, building our technology and making our first investments.

What we do

At Moonfire we provide a founder’s first money in, enabling remarkable entrepreneurs to build breakthrough businesses using the power of technology. We team up with Europe’s most innovative early-stage founders, leveraging data and a network of angel investors to help create exponential growth.

We believe a new generation of companies are providing ubiquitous and trusted access to knowledge, capital and well-being. There are three elements driving change – 1) access, 2) efficiency and 3) service quality – what we call “The Golden Triangle”. The interaction between these constituents are catalysing innovation. At Moonfire, we invest in this Golden Triangle, where companies efficiently leverage networks and platforms that offer a higher service quality and create exponential growth.

“At Moonfire we provide a founder’s first money in.”

Our founders

We could not be more excited about our roster of founders at Moonfire, and there is much more to come. Over the last twelve months, we have invested in eleven companies, supporting founders at the very beginning of their journeys. We would like to thank them for putting their faith in us and coming onboard as we built the firm. You can see them all here.

Europe is booming

We also believe that there is a real gap for seed funding in Europe. The data shows that European seed is underfunded: it has not received the same attention as it has in the US and China. We have seen existing later stage VC funds that have recently closed large rounds, which are searching for new deals coming out of seed. We believe the performance of seed investments will only get better as the exit opportunity becomes larger and more frequent.

“We believe there is a real gap for seed funding in Europe.”

The booming European scene is also attracting US firms in greater numbers than ever before – nearly a quarter of funding rounds into European startups now include an American investor – and the speed of dealmaking is accelerating. This is good news for European founders – there is more capital and more expertise available. Everything we’re seeing adds up to a ‘golden era’ for the European ecosystem and this market has benefited hugely from what we’re calling the “death of geography”, a breakdown of national and international boundaries in a post-Covid virtual environment.

Our data-driven approach

At Moonfire we aim to change the traditional “gut instinct” style of VC with a truly data-driven approach. We use technology and data to make better decisions, create better processes and ultimately scale everything we do. Our aim is to become the most quantitative fund in Europe, bringing a data platform that harnesses the deep collective real time knowledge of everything Moonfire touches, from sourcing investments to day-to-day support for our portfolio companies.

“From day one, we have seen ourselves as a technology company.”

It’s like having a “bionic suit” to supercharge what we do. Other funds use technology as a supplement to what they’re doing. For us, it’s the core. For more on this, please see Mike Arpaia’s recent post.

Our team – operators, engineers & investors

We have assembled a team that is greater than the sum of its parts and I want to officially welcome the two new Moonfire partners, Mike Arpaia and Candice Lo, who have both already made a big impact. Mike is a computer scientist who joins Moonfire with experience building early-stage start-ups and creating marketing-defining software at Facebook, Kolide and Workday. Candice is an operator turned investor with experience investing in seed and series A start-ups at Blossom Capital and Uber in Europe and China. Together we want to break the status quo and there is a lot to do.

The support & trust has been overwhelming

Here at Moonfire, we are appreciative of the support we have received from such a broad set of people who have believed from the beginning in what we are doing. The generosity of their time, relationships and thoughts has been wonderful.

There are many who took a chance on us from the get-go and that includes our LPs. Our anchor Cendana’s Michael Kim, Graham Pingree and Kelli Fontaine and other LPs – the founders, investors, institutions and high net worths. We also appreciate the early trust given to us by our lawyers like Ed Lee at Proskaur, Laurie Erlam and the whole Erlam team, Matt Westgarth-Smith and the whole HFL team, Jonathan Golden and the GunnerCooke team, Claire Palmer and John Robinson and the whole SVB team, Chris Grew and Nick Hayes of the Orrick team, Dan Glazer and Stacy Kim of the Wilson Sonsini team, Clare Johnston and The Up Group, Mark Wolff and Boville and unsung supporters such as Jerry Colonna, Henry Erskine Crum, Johan Lorenzen, Phil Chambers, Steve Crossan, Cristina Berta, Mac Hofeditz, Marcus Billstrom, Alexis Bonte, Alex Graham, Miriam Pfister, the Kleins, Richard Chapman, Gideon Nieuwoudt, Hussain Abbas, Veronika Ward, Jessicaa and Jemima from DavidsonMorris, and finally to Nico Caprez for being there at the beginning and helping to build the house!

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