VC firm Target Global has an impressive portfolio: it includes some of Europe’s most highly-valued startups, such as Revolut, Rapyd and TravelPerk.
But the 10-year-old London-based firm — which fell under heightened scrutiny after the Ukraine invasion over its historical links to several Russian oligarchs — is now selling secondaries in some of those companies.
Four sources with knowledge of the secondary market told Sifted they had seen stakes in Target’s portfolio companies for sale.
“Target Global’s position in the secondary market is a deliberate decision based on market appetite and conditions, and is a normal part of most VCs’ business,” the firm told Sifted, adding that 2024 had been a record year for exits in the portfolio.
Target has bolstered its team accordingly: Jacob Lyons, former VP of Rothschild & Co’s M&A department, joined the firm in November last year to help on secondary sales.
In response to previous questions about its links to Russia, Target has consistently said it has implemented sanctions systems and controls to ensure compliance with applicable sanctions, and that none of its directors are Russian.
The prime asset: Revolut
The highest-valued company in Target’s portfolio is London fintech Revolut, which was valued at $45bn in a secondary share sale conducted last autumn. Target backed Revolut in its 2021 $800m Series E round, when the company was valued at $33bn.
Revolut declined to comment when Sifted asked if Target had sold any shares in the company.
Other unicorns in the Target portfolio include Spanish travel platform TravelPerk, fintech Rapyd, recycled electronics platform Grover and food waste startup Choco.
TravelPerk, Rapyd and Grover did not respond to requests to comment, while Choco said Target’s stake had not been sold.
Target told Sifted it does not announce specific portfolio transactions.
Partner changes
In the past six months, Target has seen two of its five partners depart. In February this year, partner Lina Chong left Target to join German firm HV Capital as one of its first hires in London. Chong had been at the fund for nearly seven years.
Chong’s exit followed that of Ricardo Schafer, who left in December last year after five years and has since started a new firm, Zone II Ventures.
Target’s remaining partners are now Yaron Valler and Shmuel Chafets, who founded the VC in 2015 alongside Alex Frolov and Mike Lobanov. Target’s third remaining partner is Bao-Y Van Cong, who joined in 2017.
“We have restructured our senior investment team with enhanced capabilities and a refined focus,” Target told Sifted.
Last year also saw changes in the wider investment team. Tobias Winczer, who had worked on growth stage investments at Target, left the firm and joined London-based Balderton. Felix Lienau, Lodovico Carini and Mathilde Tuv Kverneland, who all worked on investments at the firm, also left last year.
On the operations side, Pedro Barros, who headed up fundraising and investor relations, also left last year and is now a partner at Paris-based VC Atlantic Vantage Point (AVP.)
Target has brought on new operations staff.
Alongside Lyons, Felix Leuschener — the founder of Drover, a car subscription service which was acquired by secondhand car marketplace Cazoo in 2021 — and James Dening — who previously led Target portfolio company Minit, which was sold to Microsoft in 2022 — have joined to help support the firm’s startups.
No new fund this year
Target has closed six funds since it was founded a decade ago. Its latest was a fund focused on early-stage investing, closed in Q1 2022.
The firm tells Sifted it does not currently have plans to raise another this year.
“Target Global is currently in a solid position with a strong portfolio and dry powder to support its development across its funds,” it said. “We are not looking to raise another fund this year, and are instead committed to supporting our entrepreneurs as their businesses grow.”
Cutting ties with Russia
Target was founded by Alex Frolov, Mike Lobanov, Shmuel Chafets and Yaron Valler.
Frolov is the son of Alexander Frolov, a Russian metals tycoon who was placed under sanctions by the UK in November 2022.
Frolov junior has never been sanctioned but, according to Target, sold his entire stake in the firm in March 2022, before stepping down entirely in November 2022, when his father was sanctioned.
Who bought out Frolov junior’s stake remains unknown.
Frolov’s LinkedIn profile now lists him as cofounder of Palta, a wellness company behind a handful of health apps, including UK femtech unicorn Flo Health and Munich-based fitness app Zing.
Target was previously backed by three LPs who are now sanctioned: Alexander Frolov senior, and fellow sanctioned oligarchs Alexander Abramov and Roman Abramovich. Target told Sifted that Frolov and Abramov sold their stakes “many months” before sanctions were imposed on them.
Target told Forbes last year that Abramovich’s investment accounted for 2% of its AUM and was limited to one fund. All investments were made prior to Russia’s full-scale invasion of Ukraine.
Read the orginal article: https://sifted.eu/articles/sells-secondaries-restructures-senior-team/
