Hello World: A Look Back at What Multiple Capital Has Achieved So Far
After successfully closing our Fund II, we want to share our progress so far and our mission going forward.
We are proud to announce that we have closed our Fund II and are now preparing the next steps to continue our mission.
Such big news requires a celebration and we want to use this opportunity to (re-) introduce ourselves to you.
I started Multiple Capital because I saw the growing tech industry as a promising investment opportunity, and I wanted to be part of it.
But rather than invest directly in the companies themselves, I chose to invest in the venture capitalists seeking out these innovators and game changers. I knew that my value add would be to help emerging fund managers structuring their portfolios and developing their investment strategies.
When I launched Multiple Capital roughly nine years ago, I was literally the first LP looking at emerging funds across Europe, and was often the first non-local LP knocking on the doors of first time funds. It felt like it was a true niche, and still feels like that because of the sheer growth of the universe of emerging, first-time and solo GPs in Europe and globally.
The venture capital market had seen a new boost after having fallen almost dormant in the tailwinds of the post-Dotcom crash. The wake of the 2008 financial crisis sparked new interest in alternative investments, and governments, corporations, high net worth individuals (HNWI), family offices and institutional investors started noticing the maturing ecosystems in our industry.
Back then, we started with an open eye and amazement for this industry. Coming from one of those rather classical institutional investors and having a fund of funds background, the first steps into this new territory allowed me personally to get to know some of you and have many fruitful discussions on the state of the European venture ecosystem and all the hard work it requires to keep it running and thriving as we have in recent years.
After working at a family office and having thoughtful discussions, we quickly realized that direct investing into new ventures required more than just deploying capital from the institutional or LP side. Out of our admiration for the work and effort by emerging fund managers, we decided to focus our allocation to them as GPs, and hence our idea was born for a fund of funds vehicle.
Since then, we have had the opportunity to talk to over 1000 of you and listen carefully to your stories, strategies and approach to venture investing. We want to thank you again for this opportunity and the trust you have placed in us.
We are particularly proud that we decided not only to listen, but also to learn. Oftentimes we are among the first institutional LPs investing in your newly established firms. And lucky as we were, we were rewarded not only with great new friendships and with being part of the community but also with the ability to prove our core thesis.
We believe in the power of the Seed stage, and that focusing our investments on building a diversified, all-European portfolio of dedicated and laser-focused micro VC funds is the right choice. From a numbers perspective, we have outperformed predictably and consistently against other VC models, while at the same time reducing volatility and correlation with other asset classes by building a highly diversified portfolio.
As many of you know, the insights we obtained and generated are not only for returns sake. Today, we use our track record to offer our investment model to new outside investors, in the hope to democratize access to the early stage VC market for a wider audience. Additionally, we advocate for the benefits and merits of new emerging GPs and stay active within our network to make introductions where we can and share our insights where needed.
But of course, our track record and performance are as important as the work we do in our day to day operations.
We invited outside investors into our structure to start our true mission of democratizing access to the European VC market for institutional investors and individuals. This has unlocked new funding that we can allocate to the ecosystem and the emerging managers we continue to back.
Our first portfolio, which we started in 2013, was able to allocate money to 10 Seed funds - most of which now have become household names in the industry - and thereby enabled investments into more than 330 companies. We not only helped create new jobs and support European innovation efforts, but we also gained access to a substantial amount of very valuable companies, including a decacorn from a previously overlooked Eastern European ecosystem.
Initially, Multiple Capital started as the first fund of funds in Europe concentrated on micro VCs. We established highly aligned incentives and a laser focus on portfolio GPs who addressed a wide range of interesting geographic niches. Our emphasis on micro VCs and our strategy of covering the entire European ecosystem not only made us stand out from a returns perspective, but has also proven to have high social impact and value-add to the ecosystem. Namely, we have bridged unconnected ecosystems and encouraged our GPs to take more risks in early stage companies where they are among the strongest and most qualified to invest.
Investing in micro VC funds across Europe seemed difficult and almost impossible to do. But it has only turned out to be possible due to your warm welcoming and introductions, and the clear demand that appears in our organic deal flow.
Was it difficult? Maybe. But, now more than ever, we are convinced that the success of early stage investing is due to micro VC funds with fund sizes below $100 million USD under management with a small set of GPs who are highly committed to the success of their portfolios and bring the knowledge, experience, and network to the table.
We are also proud to belong to the few limited partners that are open to and welcoming solo GPs. Our research and experience have shown that sometimes solo GPs have an advantage over multi-GP investors. And, more often than not, our initial commitment has supported solo GPs in closing their funds. We have never and will never regret backing outstanding solo GPs.
It is now 2021 and we have finalized our commitments for our second fund. The performance of our first generation fund is already in the top decile in the asset class and growing in TVPI and DPI as further exits are being realized. As of today, our universe of backed VC funds has grown to more than 30. We backed a total of 80+ individual GPs. And our portfolio exceeded the targeted 500+.
We are looking forward to the next years with you all and want to thank you again for being part of our story.