Early-stage European venture capital (VC) firm Episode 1 moves into third as London-based investor turns to in-house 'data-driven deal sourcing tools' to find his next big investment fund that closed for £76 million ($95 million).
Founded in 2013, Episode 1 has several companies whose names have disappeared from the 70 or so companies it has invested in over the past decade. These include 3D mapping platform FatMap, which was acquired by Strava last year, and recipe kit startup SimplyCook. Nestlé adopted this in 2021.
Episode 1 includes two funds so far, an initial pot of £37.5 million and a £60 million tranche in 2017, both of which are funded by the UK government, known as the Enterprise Capital Fund (via British Business Bank). I received support from the system. A public-private fund that invests in “high growth” businesses.
This episode, episode one, again involved government funding, but through a different vehicle known as the National Security Strategic Investment Fund (NSSIF). NSSIF is a joint initiative between the British Business Bank and the UK Government aimed at 'advanced technology' companies. British Patient Capital, a subsidiary of British Business Bank, is also listed as a limited partner (LP), as is Molten Ventures. – the artist Formerly known as Draper Esprit — Comes back after funding the second fund in Episode 1.
Elements of deal flow
Episode 1 also reveals that about a third of the fund's LPs are former or current founders, including Zoopla and Cazoo founder Alex Chesterman, Wayflyer's Aidan Corbett, and Bloom & Wild's Aron Gelbard. I claim that there is. Additionally, 21 of the founder's LPs were previously supported by Episode 1 itself.
General partner Hector Mason said one of the benefits of having VC funds and angels as LPs is the exchange of information about deal flow.
“When we have late-stage VCs as investors in our fund, they often see things in the pre-seed stage that they don't focus on, and they pass that deal flow on to us. It's the same with angel investors,'' Mason told TechCrunch. “Another advantage is when our company needs to go out and raise money, we have very close relationships with these funds and we also know what we're seeing at different stages of the market. I can talk to them about how things are going, etc. So that helps.”
As with previous funds, Episode 1 aims to invest between £250,000 and £3m in pre-seed and seed stage start-ups substantially based in the UK, with a provision for investing in subsequent rounds. It holds a “considerable amount”. Its core focus will be on software companies in the AI, infrastructure, health, open source, “techbio”, and market sectors. It will also look to invest in US and European start-ups that have a significant presence in the UK.
One notable change in how Episode 1 operates between its last fund and its latest fund is that it has built its own internal software to identify founder talent as early in the process as possible. We took a cue from other VC firms. This includes collating data from all the usual repositories such as LinkedIn, Product Hunt, GitHub, etc. and filtering out the most promising startups as well as those considering funding based on the signals detected. This includes identifying potential startups. data.
Since launching the new fund last year, Episode 1 has made about 15 investments to date, including an $11 million Series A round in London-based clinical research technology company Sano Genetics Also included. And Mason said about a quarter of these new investments were raised using new data-driven tools.
“Everything we're building is focused on getting in front of founders before anyone else. And we're focused on getting founders who are starting businesses in very difficult circumstances. , so we're very often the first fund to talk to founders now. We have very little online footprint,” he said.