First closing of our most recent €60M fund
Published by Ivaylo Simov, Partner at Eleven.
Eleven Fund III, our third fund as the name suggests, is officially up and running as of October. Most of the private investors are already on board and we plan to have our final closing by year-end.
Back in 2017, we were at a crossroads with one partner departing, the book value of our initial fund below par, dwindling cash reserves and several failed fundraising endeavors. Yet, we deem ourselves entrepreneurs and we preach perseverance to the founders we work with, so we had to take some of our own medicine. As an old friend of ours once told us: “The best founders are like cockroaches, they never die”.
Together with Vassil Terziev, who was crazy enough to join us at this difficult time, we sat at the drawing board to figure out what we have learned, what we can improve, why, and where we want to go. We also had to answer a favorite question that VCs ask from startups: “Where do you see Eleven in 3-5 years?” Everybody had a somewhat different answer, but mine was rather simple: “10x bigger”.
Fast forward to 2021 and we have managed some major feats on the road to 10x:
- The first entirely private VC fund of a similar size in the region, our €6M Fund II (2018).
- The buyout of our initial fund and its subsequent IPO, another first for our part of the world. The €6M Eleven Capital AD (2019) currently trades at a significant premium to its listing price.
- The first major VC-corporate partnership in SEE, our fintech program with VISA (2018)
- One of the biggest exits of a startup, backed by a local VC, the SMSBump sale to Yotpo (2020).
And of course the raising of Fund III (2021), only 3 years after the launch of Fund II.
What you should know about Fund III:
- At about €60M it will be 10x bigger than its predecessor Fund II. Our commitments are already at 90% of that, exceeding our initial target of €50M, which was later updated to €55M, and we are just a few weeks off from reaching our hard cap of €60M.
- We shall keep our focus on pre-seed and seed investments, however, we shall have the capacity to write larger initial checks (up to EUR 1M initially) and make more follow-ons than before.
- We shall continue to invest in startups with their roots coming from South-Eastern Europe.
- Fund III has had a flying start as we have already invested in 7 startups (from a fully dedicated “warehouse” vehicle to Fund III), including Beme.ai, ProductLead, Biopix-T, and SuperOkay, with 3 more to be announced in the coming weeks and a few more in the making by year-end.
How Fund III is different:
- We are one of the first non-generalist funds in the region with a clear focus on 5 verticals: Fintech, Healthcare, Future of Work, Future of Food, and Ecomtech.
- We managed to close it in less than a year, which is sort of a record for Eastern Europe.
- 80% of our investors are repeat investors, which together with the short fundraising period signifies the trust we’ve managed to build over the last few years.
- We have attracted more than 60 private investors, all of them successful entrepreneurs and executives, making us the largest network with “skin in the game” in the region.
- This was also made possible by the fact that we are one of the few funds in Europe with an EuVECA license, allowing non-professional investors from across Europe to invest in the fund.
Eleven Fund III builds upon the success of its predecessor Fund II. With one significant exit (SMSBump to Yotpo), two unicorns in the making (GTMHub and Payhawk) and several rising stars (Nitropack, eBag, Econic, Ondo) Fund II is on track to achieve excellent returns.
The smaller size of Fund II (only €6M) resulted in a very short investment period of only 2 years (vis-à-vis the typical 5 years) and more importantly we were not able to write bigger checks initially nor follow up significantly during the subsequent rounds of our portfolio companies. Now we shall have the ability to make larger investments and respectively take bigger stakes in our future stars.
With our dedicated efforts in Fintech (through our cooperation with Visa) and in Healthcare, we also learned that the focus on a particular vertical brings invaluable learnings and synergies. Hence, we have already started building clusters of startups and relevant support networks in the 5 verticals mentioned above, which shall further bolster and add even more value to our portfolio companies within these verticals.
Last but not least, this would not have been possible without our ever-growing team, which currently comprises 14 professionals, including 6 partners, making us one of the biggest teams for a similar-sized VC in Europe.