Felix Capital raises $600 million for new fund as it eyes next wave of mainstream startups

  • Consumer-focused venture capital firm Felix Capital has raised $600 million for a new fund.
  • The fund is its fourth since its inception in 2015 and will invest in emerging sectors such as Web3.
  • The increase comes as investors prepare to back private companies more cautiously amid falling valuations.

Felix Capital, a London-based venture capital firm behind consumer technology firms such as Deliveroo, Farfetch and Peloton, has raised $600m in capital for a new fund, bringing total funds under management to more than $1.2 billion.

The fund, Felix Capital’s fourth since its inception in 2015, doubles the amount of capital overseen by the firm as it seeks to lead a wave of new investments in emerging sectors such as Web3 and other consumer areas at a critical time for the global startup ecosystem. .

Market uncertainty due to soaring inflation and geopolitical risk has triggered a severe downturn in public and private technology markets. The slowdown and decline in venture capital has already affected tech startups that have reached high valuations over the past decade.

In recent months, several unicorn startups worth billions of dollars, such as fintech giant Klarna, have been forced to cut jobs, put themselves up for sale or face significant valuation declines, as an environment of uncertain funding clouded their future.

For Frederic Court, founder of Felix Capital and former investment banker at Lazard, the current panic among VCs and startups follows a year in which attitudes towards growth were “very exuberant”, but he thinks the industry “has been reminded that macro matters” in 2022.

“The main difficulty over the last 18-24 months was not so much finding attractive opportunities or great companies or great founders, it was more a question of assessing what these companies were worth,” he said. -he declares.

Despite the challenging environment, Court believes the tech-driven consumer trends that have emerged during the Covid-19 pandemic are here to stay for the long term, giving reason to remain confident in investments.

“People have gotten used to the convenience of ordering online, using new tools for collaboration and communication and all these new platforms for entertainment, for creativity,” he added. “All of this is not going to go away.”

Despite this, Court said he doesn’t think many companies will go public soon given “a slowdown” in IPOs, but expects strategic mergers to take place where it makes sense for startups. to “rebalance their activity or readapt to the needs of the modern consumer”.

Felix Capital, which closed its fund earlier this year after surpassing its $500 million target, will seek to invest in up to 25 tech startups over the next two years across Europe and the early-stage US. , but has the option to invest later. steps too.

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