Yet another early-stage venture capital fund closed in Europe this week, as Elkstone rounded up a €100 million ($108 million) pot for Irish startups. It comes a day after Lifeline Ventures closed a €150 million ($163 million) fund for early stage startups in Finland, while several others have landed across the continent in recent months.
Elkstone, an asset manager that has spent the last decade privately investing in seed-stage future unicorns like Flipdish and LetsGetChecked, has launched its inaugural venture capital fund with the backing of the Ireland Strategic Investment Fund (ISIF) and Enterprise Ireland (EI).
The new fund claims approximately 250 limited partners (LPs) in total, including a large number of secretive businessmen from Ireland.
A year in the making
Elkstone first announced plans for its venture capital fund in January last year, initially targeting €75 million. Within three months, however, it revealed that it raised the cap to €100 million, with a view to supporting seed and pre-Series A startups with investments in the €1 million to €2 million range.
While the fund has only now officially closed, Elkstone says it has already committed about 10% of its funds to six startups, including Bluedrop Medical and Inclusio, with several more deals to be closed “soon”.
One of the major drivers behind the new fund was a recent legislative change made by the Irish government to the Employment Investment Incentive Scheme (EIIS), an initiative that allows Irish start-ups to secure investments that are more tax-efficient for the economy. investor. Due to the changes that Elkstone had pushed for, investors now benefit from a tax reduction of up to 40%. Until then, a fund of this size would not have been possible, according to Elkstone, due to the risk/reward ratio.
“Our fund investor base, comprising both entrepreneurs and private capital alongside EI and ISIF, is a key asset in helping us provide meaningful value to Irish founders looking to unlock their business potential and scale internationally,” said Alan Merriman, CEO of Elkstone . in a statement. “While the macroeconomic backdrop is undoubtedly challenging, it is a good time to invest and we are very positive about the prospects for disruption and innovation.”
It’s true that VC funding has largely declined at all stages in recent years, but data shows that funding has been more resilient at earlier stages, especially in the start-up phase. In addition to the new Life Ventures fund in Finland announced yesterday, we have seen a number of early-stage venture capital funds appear on the European stage since February. For example, Britain’s Amadeus Capital Partners partnered with Austria’s Apex Ventures for an €80 million ($87 million) fund targeting deep tech startups, while France’s Emblem and Ovni Capital each launched a new €50 million ($54 million) fund. ) announced. Meanwhile, Playfair Capital in London closed a $70 million pre-seed fund.
Turning specifically to Ireland, Elkstone’s new fund represents one of the largest – if not the largest – to emerge from The Emerald Isle. In comparison, Dublin’s Frontline Ventures launched a €70 million seed fund for European B2B startups in 2021.
Having ISIF on board as an LP is a huge boon for Elkstone, and it comes at a time when Ireland is clearly doubling down on its investment ethos – last week it unveiled plans to set up a sovereign wealth fund a year ahead.
“This fund expands our early stage venture capital reach and gives Irish companies a valuable new opportunity to raise the capital they need to grow,” added ISIF Director Nick Ashmore.