German venture firm misses fund target as investors pull back
German early stage investor Earlybird Venture Capital has missed the target for its latest fund after protracted fundraising was hit by a market drop in confidence in the venture industry.
Earlybird closed its fourth fund on €127m ($189m), a similar level to its third fund, despite having originally targeted between €150 and €200m. The fundraising also took longer than expected. The gap between the first and second close was 12 months, not the six-month period it had hoped for, the group said.
Rolf Mathies, a managing partner at Earlybird, said: “I would have loved to closed the fund sooner, but it takes time before official statistics show the good returns venture capital offers,” he said.
However, he added: “I am very optimistic. A few years ago there were about 200 venture capital firms in Germany, now there are about 40, so there is less competition on the deal side. It means about 80% of the deals we want, we get.”
New investors in Earlybird's fund include Japanese gas company Osaka Gas, Abu Dhabi Investment Authority subsidiary Procific and the European Investment Fund, a European Investment Bank-backed venture capital investor.
Earlybird’s first two funds ran concurrently , raising about €60m each. Its third fund, raised in 2000, hit $240m (€161m).
The fundraising is the latest to have struggled over the past 12 months. A report by trade body the European Private Equity and Venture Capital Association in June found fundraising by European private equity and venture capital groups fell by almost a third last year.
--write to phodkinson@efinancialnews.com
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