Geneva, Switzerland-based startup venture capital firm Forestay has been busy. This week the firm closed its second fund, Forestay Capital II, at a hard cap of $220 million. The firm was relatively unknown in Europe until a few years ago when it began leading funding rounds for enterprise startups, most notably Zurich-based scanning software startup Scandit, which has raised $273 million to date.
The Forrestay II fund will target its “sweet spot” of investing in key growth rounds of $10 million to $15 million at companies' transition stages, and will invest across Europe and Israel.
To date, the venture capital firm has backed 13 companies, including K2view, Nexthink, Scandit, and Wasabi, three of which have become unicorns and two have been acquired. Most recently, it backed EPFL spinout Neural Concept, which raised $27 million in a Series B round to work on AI-driven rapid manufacturing design.
Forestay also led the Series A round of Portuguese “predictive maintenance” startup Stratio in 2021, raising $12 million.
The Forestay Fund was established as a fund of B-Flexion, a private investment firm founded by the Bertarelli family, known for building Serono into the world's third-largest biotechnology company before its merger with Merck KGaA.
Forestay is led by Frederic Wohlwend, former global chief digital officer at Merck KGaA and Serono.
“As the chief digital officer of a large company, primarily in the biopharma clinical space, I had the opportunity to look at the entire value chain from early stage research to distribution for fairly large companies,” he told TechCrunch over the phone. “Knowing companies inside and out is what led us to decide to focus on enterprise and enterprise AI.”
While it's a “very competitive market,” Wohlwend said the fund is “very specialized in how we do venture,” adding: “We're only in enterprise AI and SaaS. We don't do hardware, we're not dabbling in sensors or anything like that. We're very stage-specific, working mostly in Series B. We can do rounds A through C, but our sweet spot is Series B at the inflection point. That's why we position ourselves as a 'mostly growth' fund, because we get our targets as soon as they have some revenue.”
He added that Switzerland is an “interesting ecosystem” and that, as we reported recently, southern Europe is also on the rise.
Forestay's new fund is also backed by Anaïs Ventures, an investment firm that is part of the Firmenich family that built the perfume empire.
“Foresty's focused investment strategy and operational acumen, honed through years of industry experience, are perfectly aligned with our vision,” Julien Firmenich said in a statement.
While the European consumer market is fragmented by geography and language, there is a very strong established market for SaaS and enterprise, with a number of enterprise-focused VCs.
In fact, a detailed analysis of the top companies and trends in the European and Israeli SaaS markets last year found that a market reset in the SaaS ecosystem is being driven by the growth of generative AI. But the emergence of Forestay is a good thing, as it provides more funding options for growth-stage startups in Europe, where growth capital is often harder to come by than in the US.