Draper Esprit plc and Earlybird Digital West have entered into a Strategic Partnership Agreement to share dealflow and resources to co‐invest in high growth technology companies across Europe.
Draper Esprit has further taken a significant stake in Earlybird’s new Digital West Early Stage fund VI (“Earlybird Fund VI”) and will invest initially €18m (£16m), and subsequently invest a further c.€17m (£15m) a year until 2022. Earlybird is one of Europe’s most active venture capital partnerships with a team of 23 investment professionals, managing over one billion Euros, and has invested in leading technology companies such as N26, Smava, UI Path and Peak Games.
Draper Esprit and the Earlybird Digital West partner group today announce the entry into a Strategic Partnership Agreement to share dealflow, investment resources and expertise to co‐invest together in high growth European technology companies. Both parties equally believe that European entrepreneurs have the ability to build significant global businesses of the future and that this partnership will enable further growth within the ecosystem.
In addition, Draper Esprit has invested an initial €18m (£16m) in the latest Earlybird Fund VI and committed to invest a further c.€17m (£15m) per annum over the next four years in the fund. Following Draper Esprit’s commitment, Earlybird Fund VI will have total commitments of €175m of which €36m has been invested to date across 13 companies. Initial companies in the Earlybird Fund VI, in which Draper Esprit has acquired an indirect stake, include Shapeshift, Everoad, Movinga, Fraugster, Medidate, Xain and Crossengage; all of which Draper Esprit believe have exciting prospects.
Draper Esprit has also issued new shares to the benefit of the Earlybird Digital West partners in exchange of a minority stake in the Management Company of the Earlybird Fund VI. The consideration has been satisfied by the issue of 64,820 new ordinary shares of one pence each in the capital of the Company (the “Consideration Shares”) to the Earlybird Digital West partners. Application will be made for the Consideration Shares to be admitted to AIM and ESM, with trading expected to commence on 10 July 2018 (“Admission”). Upon Admission, the Consideration Shares will rank pari passu in all respects with the existing Ordinary Shares. Following the issue of the Consideration Shares, the Company’s issued share capital will consist of 99,057,545 Ordinary Shares, with each share carrying the right to one vote. The Company does not hold any Ordinary Shares in treasury. The above figure of 99,057,545 Ordinary Shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company.
With, in aggregate, over 100 high growth companies across Europe in their respective portfolios, the Draper Esprit and Earlybird Digital West teams will continue to manage these portfolios independently. Draper Esprit will continue to operate from its existing offices in London, Dublin, Paris and Cambridge and the Earlybird Digital West team will continue to operate from its existing offices in Berlin, Munich, Cologne and Istanbul. The Strategic Partnership Agreement creates one of the most active venture capital partnerships in Europe deploying up to €200m a year in Seed, Series A, B and C technology companies. It is anticipated there will be c.15-20 new deals a year by combining various pools of capital (listed PLC balance sheet, LP co‐investment funds and angel co‐investment funds) into the equivalent of a €1bn+ ($1.3bn+) pool of venture capital, one of Europe’s largest.
Hendrik Brandis, co‐founder of Earlybird said: “Earlybird has built a leading VC position in continental Europe, and Draper Esprit has an exceptionally strong position in the UK, Ireland and increasingly across Europe. Earlybird has significant backing from mostly institutional private investors, and Draper Esprit has managed to very successfully access public capital markets, funds which we can co‐invest alongside. We believe this creates a very strong partnership of significant scale with many potential benefits for all parties – whether entrepreneurs, investors and our respective firms.”
Simon Cook, CEO and co‐founder of Draper Esprit, said: “We have worked with the Earlybird partners as co‐investors and industry members for many years and have huge respect for the leading VC position they have built in Germany and across continental Europe. With our resources combined as genuine partners we will be able to help European entrepreneurs scale their global ambitions even higher. Together with our recent placing to raise £115m, and strong financial performance reported in our recently announced results, this strategic partnership builds on the significant momentum we are achieving”.