Global Founders Capital will deploy Rocket Internet’s cash instead of raising a new fund | TechCrunch

Global Founders CapitalBerlin-based early-stage VC firm with close ties to the German Startup Factory rocket internetRocket is going to be the enterprise arm of the Internet.

The VC had previously raised two $1 billion funds and, a few years ago, its name was appearing in dozens of deals per year. But then the matter calmed down. Now we know why: Going forward, it will invest exclusively from Rocket Internet’s balance sheet.

Last year financial Times It was reported that Global Founders Capital was in the midst of a major strategic change. The VC firm contacted TechCrunch a few weeks ago to confirm the pivot and discuss the reasons behind the change.

“To be transparent, there have been considerable changes at Global Founders Capital in recent years in terms of the structure of the fund and the composition of the team,” Global Founders Capital partner David Santeff (pictured above) told us.

Santeff said the company has decided it is not the right time to raise a second fund because it is not a good time to invest as they do not believe there are many good opportunities that meet the company’s criteria and remain competitive. They do not need much capital to survive. Against other investors for deals.

Global Founders Capital was originally structured as a traditional VC firm with multiple limited partners participating in the fund. With its first fund, it supported future unicorns like persons, Reverse And To guess, With its second fund, the firm invested in several companies that TechCrunch has also covered, such as penny Lane, anchorstore And Seyna,

Before joining Global Founders Capital, Sentif worked for Rocket Internet for seven years. Were investors in Global Founders Capital from the beginning. Therefore, there has been a close relationship between them since the beginning.

“After the deployment of this second fund, we decided not to raise any further funds. “Instead, we will use Rocket Internet’s capital,” he confirmed. “We have €300 million to deploy for venture investments on the balance sheet. We have no fundraising plans.”

Frankly, this is a bit strange because the company’s past performance looks quite good. According to Santef, the first fund is expected to generate returns between 3x and 4x. “For other funds, it is too early [to say],” he continued. “But we have some clear winners like Pennylane. We entered the pre-seed stage and the company is valued at over €1 billion.

The new strategy means Global Founders Capital is now much smaller than before, with only five partners left: Fabricio Pettena, Don Stalter, Cedric Esselman, Centf, and of course Rocket Internet co-founder and CEO Oliver Samwer.

The new version of the firm will also focus solely on early-stage investments, with the potential for follow-on investments in later rounds (Series A, B, C, etc.).

Did Global Founders Capital decide not to raise a third fund because it did not get enough support from potential limited partners or because of the current tech recession compared to 2021 (with the exception of the artificial intelligence boom)? Probably the decision depended a little on both.

“It was not the best moment to raise money [limited partners],” Santefe told us. “We think it was difficult to have a mandate to deploy capital.”

“It’s an easy decision to make when you have €300 million in the bank,” he said. “If other VC firms were in the same boat, they would have taken the same decision. We do not rule out the possibility of raising funds if the circumstances are right and favourable.

For now, the pivot reverses the fund’s earlier expansion, when it expanded into more geographies, technology sectors and funding stages and the Global Founders Capital name was attached to multiple deals.