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Global Founders Capital will deploy Rocket Internet’s cash instead of raising a new fund | TechCrunch

Global Founders Capital will deploy Rocket Internet’s cash instead of raising a new fund | TechCrunch

Global Founders Capitala Berlin-based early-stage VC firm with close ties to German Startup Factory. Rocket Internetis going to be the venture arm of Rocket Internet.

The VC previously raised two $1 billion funds and, just a few years ago, its name appeared in dozens of deals each year. But then, things went quiet. Now we know why: Going forward, it will exclusively invest from Rocket Internet's balance sheet.

last year Financial Times reported that Global Founders Capital was in the midst of a major strategic shift. A few weeks ago the VC firm reached out to TechCrunch to confirm the pivot and discuss the reasons behind the shift.

“To be transparent, GlobalFounders Capital has undergone a lot of changes in recent years — both in terms of fund structure and team composition,” GlobalFounders Capital partner David Santiff (pictured above) told us.

Santiff said the firm decided it wasn't the right time to raise another fund because it wasn't the best time to invest because they didn't believe there were many good opportunities that met the firm's criteria and They don't need much capital to stay competitive. against other investors for deals.

Global Founders Capital was originally formed as a traditional VC firm with several limited partners participating in the funds. With his first fund, he invested in then-future unicorns such as Persona, Revolution And Abstract. Along with its second fund, the firm, which invests in several companies, has also covered TechCrunch, e.g Penny Lane, Anchorstore And Cena.

Prior to joining Global Founders Capital, seven years ago, Santiff worked for Rocket Internet. Was an early investor in Global Founders Capital. Hence, they have had a close relationship since the beginning.

“After deploying this second fund, we decided not to raise another fund. Instead, we will use Rocket Internet's capital,” he confirmed. “We have €300 million on the balance sheet to deploy for venture capital. We have no plans to raise funds.

Frankly, this is a bit strange as the past performance of the firm looks quite good. According to Santif, the first fund is expected to generate between 3x and 4x returns. “For another fund, it's too early (to say),” he continued. “But we have some clear winners like Penny Lane. We entered the pre-seed stage and the company is worth more than €1 billion.”

The new strategy means that Global Founders Capital is now much smaller than before, with only five partners remaining: Fabricio Pettena, Don Stalter, Cedric Asselman, Sainteff and of course Rocket Internet co-founder and CEO Oliver Samwer.

The new version of the firm will focus only on early-stage investments, with the ability to make follow-on investments in later rounds (Series A, B, C, etc.).

Did Global Founders Capital choose not to raise a third fund because it didn't get enough support from potential limited partners or because of the current tech slowdown compared to 2021 (with the exception of the boom in artificial intelligence)? Perhaps the decision depends on a bit of both.

“It wasn't the best moment to raise funds with (the limited partners),” Santiff told us.

“It's an easy decision to make when you have €300 million in the bank,” he added. “If other VC firms were in the same boat, they would have taken the same decision. We do not rule out the possibility of raising funds when the conditions are right and favorable.

For now, the pivot reverses the fund's earlier expansion, when it expanded into more geographies, tech areas and funding rounds and the Global Founders Capital name was attached to many deals.

(tag to translate) David Santiff

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