Swiss early stage VC Redalpine has closed its seventh fund of $200m — its largest early stage fund to date — and has opened a new office in London.
The VC will write cheques of between €1-6m into 15-20 startups across AI, software, biotech, food, fintech, healthcare and energy. 50% of the fund will be reserved for follow-ons.
Since its founding in 2006, Redalpine has invested in 100 companies: including neobank N26, BNPL startup Klarna, tax-filing platform TaxFix and gen AI startup Mistral. The firm says its net annual returns to investors across all its active funds over the last 10 years is around 25% (the top quartile of VC funds between 2010 and 2020 had an average annual return ranging from 15-27%, according to research by Cambridge Associates.)
Redalpine’s founding partner Michael Sidler says the firm continues to invest in Europe as it is renowned worldwide for its top class universities and engineering talent. Additionally, seven of the world’s most innovative countries are in Europe, according to the 2023 Global Innovation Index.
Sizing up
While funds in Europe seem to be growing larger — London-based VC Balderton Capital announced $1.3bn in fresh funds in August, and Index Ventures and Accel also raised big funds this year — Redalpine has always kept its funds under $200m, and plans to continue with that strategy.
“We’re very firm believers that in the early stage, you need small funds. Funds below $200m have better performance than larger funds and that’s backed up by data,” says Sidler.
“In order to execute an early-stage investment approach, the fund size needs to correlate with the ticket size. Otherwise, you end up with a distorted fund model, either with more seed-stage investments than the team can handle or investing larger tickets in the later stage, which moves you out of the early-stage sweet spot,” he adds.
Redalpine has made nine investments with its new fund, including Proxima Fusion, which focuses on clean energy production through fusion technology; LegalFly, a generative AI copilot for lawyers; and Expression Edits, a gene-editing company developing life-saving therapies.
The firm declined to name any of its existing or new LPs, but mentioned that KfW Capital, a subsidiary of the KfW Development Bank in Germany, has invested in its new fund.
A new UK outpost
Redalpine is setting up a new base in London to “follow the deal flow,” says Sidler — specifically, science-driven startups coming out of UK universities such as Oxford, Cambridge, King’s College and Imperial College in the fields of techbio, life sciences and AI.
It’s not the only VC to have set up a UK outpost: US VCs Andreessen Horowitz and IVP, as well as Japanese VC Nordic Ninja opened an office in London in 2023.
Redalpine has been ramping up its investments in the UK in the last 2-3 years, and it felt like the right time to have people on the ground there permanently to “help serendipity” in meeting with startups and LPs, adds Sidler.
The firm already has 10 UK-based companies in its portfolio, including 9fin, an analytics platform for debt capital markets; cultivated meat startup Uncommon, and Hypervision Surgical, a King’s College spinout which offers computer-assisted tissue analysis for improved surgical precision.
Read the orginal article: https://sifted.eu/articles/redalpine-closes-seventh-fund-of-200m-news/
