TransferWise co-founder backs seed fund investing in "overlooked" start-ups

By John Reynolds on Wednesday 11 December 2019

Digital Banking

Ada Ventures wants to direct funds to companies targeting "underserved" audiences.

  TransferWise co-founder backs seed fund investing in
Image source: Image provided by Ada Ventures

The co-founder of TransferWise is backing a seed fund which has raised £27m to invest in start-ups which may have been overlooked and those which target audiences sometimes bypassed by venture capital investment.

Taavet Henrikus, the co-founder of TransferWise, is one of the investors in Ada Ventures, whose focus is on investing in "overlooked founders", who are building companies that focus on "underserved customer groups".

Ada Ventures points to statistics showing that 92 in every 100 dollars invested in Europe goes to all male teams and that 83 percent of founders are white while 82 percent are university educated.

Ada Ventures says it wants to ensure funding is more diverse and is spread across gender, background and race.

It has secured £27m of funding, two thirds of which has come from the British Business Bank while other investors include investment firm BlueSky Capital,  London-based VC firm Atomico and Henrikus.

Typically, Ada Ventures says it will initially invest around £500,000 and will use the funding to make around 30 investments in companies targeting solving global problems, which could be in healthcare or relate to the future of work.

Investment will also focus on companies targeting audiences which are sometimes overlooked by venture capital investing, such as ageing populations, women and young people under 20.

Ada Ventures was set up by Francesca Warner and Matt Penneycard, who were colleagues at VC firm Downing Ventures and another VC fund Seraphim Capital.

The fund also employs scouts, who are incentivised to seek out worthwhile investment opportunities.

Warner said: “Having worked in Venture for the last four years, and through co-founding Diversity VC, I’ve seen how structurally narrowly-focused the industry is, investing in the same founders building products and services for the same customers."

“This is a huge missed opportunity. Ada Ventures is here to change that. We’ve redesigned our funnel of opportunities with Ada’s scouts to give us wide exposure to founders who come from diverse backgrounds and who are solving some of the world’s most significant problems, problems that have been overlooked by the current crop of founders and VCs."

“Fundamentally, Ada Ventures is about true inclusion, and we will invest in anyone, no matter what they look like and where they come from. We are incredibly proud to have such an experienced and supportive group of investors partnering with us to make Ada Ventures the most inclusive fund in Europe.” 

Ken Cooper, Managing Director, Venture Solutions at the British Business Bank, (pictured) said: “We know from the British Business Bank’s own research that more needs to be done to increase the diversity of entrepreneurs backed by venture capital investment."

“Not investing in a diverse mix of business founders is a missed opportunity for the UK economy and Ada Ventures, with their fund focused on democratising VC investment regardless of gender, race, background, or location, is an important step in the right direction to address this.”

“Our Enterprise Capital Fund programme has a track record of successfully backing first time fund managers like Ada Ventures, with our cornerstone support helping to unlock further investment from other investors. We are always looking out for good quality funds, with strong differentiation, that we can back to invest in the equity gap.”

 

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